Sunday, August 26, 2012

Retirement in a Modular homes: Is "Affordable" Really a Trap?

You can't live on the view!  Be careful about where you
put your vacation home!
Moving or buying a retirement home? Buying a modular? Is it going to be put on leased land? Did anyone tell you what that really means?

For example:  Did they tell you that the piece of real estate you are placing your trail home, modular or park model on is land that is designated as land for transitional use? No. You need to be aware of what that term means.

In the world of land use planning, land that is not ripe for development can be used for non-permanent purposes until the time is right for something more lucrative. Storage unites, temporary structures, dog kennels, and RV resorts or modular unit communities are a few uses that land can be put to and yet be converted without a great deal of expense or up roar for the land owner. The golf course you built on may even fall under that designation.

I was talking to a friend the other day that had bought a modular home on leased land in a planned community. It was sold to people as an affordable place they could spend the rest of their lives. They bought the modular and paid the landowner a fee each year to rent the land.  After several years of living in the modular while paying their rent faithfully, the owner of the land gave them notice to vacate the land. They could not sell the used modular. The people lost their home to the bank. What had been touted as a solid investment turned to dust.

Did they know that this might happen? Maybe. But I think that they thought they could sell the modular if that day ever came. I don't think they realized the risk they were taking. This type of ownership allowed them to buy a home they would not have been able to afford otherwise. It was a very well-set and beautiful trap.

I have been on city planning commissions, sold real estate, been a land owner and currently own a park model in an RV restort. I am well aware of the risks that you could be taking. Talk to your real estate  broker about the chance that you could be caught in financial trap. Here are a few things you should keep in mind:

  1. A modular, trailer house or a park model depreciates like a car. Never expect to get the money you invested back out of it. I think that if you cannot afford to walk away from it don't buy. But then that is just my opinion.
  2. When you are renting land, the land owner can ask you to vacate the land with legal notice. You need to be aware of what it would cost to move the modular and if you can sell it.
  3. All of the land that you rent is a possible transitional use. 
  4. Even golf coursed that borders your land may be developed into something else. 
  5. Do not assume that the land next to your house will be used for what it is being used for the day you buy. No one can guarantee that. 
  6. Unless the contract you sign with your land owner is very clear cut, you may find that the rent on your land will increase with each passing year.  This can be a money pit you did not expect.
  7. The land owner can and probably will have a great deal of control over what you do with that land.  Planting tree, flowers or adding to your structure may be under their control.
I am sure there are more cautionary notes. The idea that you can put a home on somebody else's land without any harm coming to you may be a myth. Beware! It can come back and bite you in a big way.  

I'm just saying!


How to be a Snowbird...answers and lists  (


  1. This is valuable information that includes many points that I didn't know. It's a shame when retirees get hit with unexpected developments that turn their retirement years into a nightmare.

  2. Susan, thank you for the comment.

    This type of thing is not only a borders on a crime. The bill of goods that seniors are sold at every turn can just curl your hair. But I don't know how to warn them if I don't write about it. Please pass the word!



Leave your thoughts...I am interested.

Featured Post

Five Little Ducks...stories played out!

The children's song about the little ducks leaving the nest to fly away has always been one of my favorites.  Every mother has seen thei...