Houses/Trailer/
The words 'trailer park', for most, will conjure up images of white trash
deadbeats mixed in with little old grannies living on social security. And
while there's a lot of that out there, it's not everyone in a trailer park.
In San Diego, living in a trailer might only mean that you don't like it when
the bank is getting a ridiculous chunk of your money with larger loans.
Interest-only loans, refinancing, and other shakedown schemes are designed to
take advantage of high real estate prices. When you do the math and look
at how much you flush down the toilet in finance charges, big loans just
aren't that appealing.
In my park, I pay $595/mo in rent on the space my trailer's on, in addition
to my house payment. In five years, the space rental and utilities will be my
only expense. Based on a 1.6% per year property tax, if you buy a $450k home,
you're already paying the same amount per year in tax as I pay in rent. If
you're taking out a loan on a condo which you can magically find as low as
$175k, even assuming your loan was at only 4% interest, your interest payments
would be around what I pay on the space rental fee. And here in the SD area,
condos are $300k. Floating large amounts of money on loans leaves you burning
so much money in interest payments, that you're better off taking smaller
loans and paying them off quickly as you move up from house to house.
So, my advice to anyone my age or younger who's looking for a place to live
in: just swallow your pride and buy a mobile home. It'll be paid off a lot
sooner than a more expensive place, which means it won't be long before you
can start putting money into a savings account to buy a larger place. Think
of it as a middle-ground step between rent and home ownership. It also means
that if you lose your job or some other emergency strikes, you just put your
home upgrade plans on hold for a while, rather than having to talk bankruptcy
within months.