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Renting vs Buying

There are a lot of discussions among newer park residents about what makes the most sense when it comes to renting or buying. Everyone seems to have a different point of view and it really comes down to personal circumstances.

Some will suggest that if you can buy a reasonable park model on a rented lot for around $15,000 then why rent. How much do you stand to lose? Others suggest that renting gives you that opportunity to see if you like it before you invest anything more long term.

From those long time residents we have spoken to it seems most started off either renting a park model or coming in an RV or similar. The one common theme is that they all ended up buying sooner or later. It is rare to find long time visitors who still rent.

Renting

Renting a park model can certainly provide you with a good opportunity to 'try it out' to see whether you like the lifestyle and the park. It also allows you an affordable way to spend as little as one month in the park in the sunny south if you are not yet able to commit for the whole winter season.

Even though you are only renting you should give some consideration to whether the park is one you may later consider as a more permanent location. It is easy to become part of that park community and not want to change park locations should you later decide to buy your own trailer.

The park model itself is actually less important than the park where it is located. Of course you want a clean and comfortable unit but you are experiencing a lifestyle not just renting a place to sleep. Look at the park website and make sure it has the facilities, amenities, and activities that suit your interests and lifestyle.

This is also a good time to compare the differences between privately-owned parks and resident-owned parks (see: private vs. resident-owned parks section). If you feel you would prefer a resident-owned park (should you later decide to buy) then you should focus your rental search to those parks.

The wide range of rental prices of course generally reflects the quality of both the park and the unit. They are also affected by location in the park. Those on the outside backing maybe busy streets will be less costly than those closer in and in easy proximity of central facilities. When you browse the park sites you will easily see the differences.

The average cost of a rental in a quality park is probably in the area of $15-2200 per month. (Although there are more affordable examples in some smaller parks for as little as $1000 to $1500 a month). In addition to your rent you may have some utility costs including whatever telephone, television, and internet services you add.

The term of the rental will probably impact the monthly cost. A shorter term can cost you more (per month) than taking the place for the whole season. The month(s) being rented can also affect the cost. 

An 'affordable' way to 'try it out'

Renting for the most popular months will often cost more. That tends to be the January to March period. Some good deals can be found if you are willing to rent in the months of April, November, or December. Some rentals will be as much as 30 to 50 percent lower in those months.

If you only have limited time (not quite retired yet) you may want to give the off-season a try. Some parks even offer rentals in the off-season for as little as two weeks. They realize you will get sold on the lifestyle and their parks.

 Buying and Renting the lot in a Privately Owned Park 

That wide range of prices for buying a park model in a park is all for good reason.

The lowest price of (say) $5,000 probably puts you into a very old unit and possibly one that is smaller in size, has only propane heat and cooking, and may lack outdoor amenities. And of course it can be in poor repair ... but not necessarily. It can still be quite a comfortable unit and serve as an alternative to renting.

The high end units are quite luxurious, will have more space and a lot of amenities, and would be located in a park where you are also buying an assigned lot and your share of the park ownership. (see: private vs. resident-owned parks).

If you are going into a privately owned park and renting the lot then you can get quite a nice unit with nice amenities for around $15,000. And then there are the annual costs to pay.

The following is a general guide only intended to give you some idea of annualized costs.

Owned unit on a Rented Lot
(Using a $15,000 park model in an average privately owned park)

Lot Rental (including misc. park fees)
Insurance
Basic Utilities

 

$5,000
250
600
$5,850

*In addition to the above costs you will need to add whatever upkeep and financing costs apply to your situation and park model condition. Also, any telephone, internet, and cable TV services you decide to purchase.

It is far more likely that your park model will depreciate rather than appreciate like a house or other property. That can vary a lot but generally the park models do in fact depreciate. (Also check the comments about unit age under 'watch out for the rules' section in About RV Resort Parks.)

But those Rents Keep Going Up

It seems the market has been strong enough to warrent rent increases every year that we have been reporting on the parks. A 5 to 10% annual hike in rents is quite common. So when budgeting your park model in a private park, renting the lot, you may want to account for these annual rent hikes.     

Buying in a Resident-Owned Park

The alternative of buying into a resident-owned park will make the original investment considerably more but will also provide more opportunity for hedging against inflation and somewhat reduce annualized costs. (see: Private vs. Resident-Owned Parks).

If you browse the resident-owned park websites you can get an idea of the prices for park models and lots. Prices range quite widely but an average investment can range from maybe $50,000 to $100,000 and some actually near $200,000 and over. An average may be around $80,000.

It is important to remember that you are buying into the whole park, not just the park model and the lot. (Legally you do not actually own the lot ... it is assigned to you ... but rather a percentage of the whole park). The price variance in the resident-owned parks is impacted by your share in the asset value and financial strength of the whole park. As a result there can be quite a difference in the prices from park to park. Very much like buying into a condo apartment.

The following estimate is for comparison purposes only. Every park and situation is somewhat different.

Owned unit in a Resident-Owned Park.

Annual park HOA (condo) fees
Insurance                 
Basic Utilities
Total Direct Cost*

$1,900
     250
     500
$2,650

*In addition to the above costs you will need to add whatever upkeep and financing costs apply to your situation and park model condition. Also, any telephone, internet, and cable TV services you decide to purchase. Values of the property and park shares may appreciate rather than depreciate.

(Also see the discussion on the current market in the How Much Will it Cost Me section)

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