Mobile Home "investment" - high price but 1% rental vacancy

[Miranda Crown]

We are looking at a 1972 2bd, 1ba 1100sq ft mobile home on 0.25acre with detached garage and storage building in a unique neighborhood as a rental property. It has brand new roof, windows, flooring, furnace, paint, window coverings. It is very close to the center of town, on one side of the neighborhood is a full mobile home park, on the other side, older 1/2 acre properties with well-maintained SFH's. We would be buying with cash/equity line.

Our town is in a major upswing, it is rapidly turning into a have's/have-not's mountain town with sky-rocketing real estate prices. Lots of trust-fund lifestyles, lots of vacation homes and 2nd homes. Any SFH below $250k has multiple offers/bidding wars, etc. Opportunities for "affordable" rental investments are severely limited. The upside is a <1% rental vacancy, people are desperate to find places to live, just not enough homes to go around for the population growth and many renters are being displaced by owners wanting to cash out in the up market. I suspect a bubble is coming but the population will likely to continue to grow as we will have a 4-yr college starting in 2016.

The problem is the cost, they are asking $124,000 which is the lowest in the area(!) but still high, we would definitely make a significantly lower offer. We believe we can get between $1000 and $1200/mo (still need to calculate the actual return based on other expenses). It would be a longterm rental but we think this neighborhood may actually convert to a SFH area eventually and we could build a home later on.

Pros/cons, any thoughts, advice?  Also, can you direct me to a good calculator or spreadsheet to input our expenses?  Thank you!