Should I tear down this mobile home next to my duplexes?

[Greg Atwood]

So I need some advice on a rental property I just purchased 2 months ago. It consisted of 4 duplexes (8 units) and a mobile home. The duplexes were all 3 years old in a newer part of town, but built on a property with an existing old mobile home with a long term renter. The seller would only sell the property with the mobile home included and made it sound like they were looking out for this renter friend of theirs. I found out that it takes about 4 months rent from the mobile home just to cover the insurance and insurance is much more expensive on mobile homes. The place is not crumbling, but not in great shape either. The duplexes, however, are in good shape, new, and the area is growing, surrounded by $300-400K homes, and they cash flow well, so I went for it despite the mobile home.

Fast forward to today, and I just spoke with my property manager who said that the mobile home renter just gave his 1 month notice. The mobile home was renting for $600/month. It costs about $2200/yr to insure it. Our options are:

1) to try to put some money into it to fix it up and rent for a bit more.

2)Find a renter to take it as is for around $600/mo again.

3)Tear it down with the thought that it's presence may actually decrease the value of the other properties----possibly could build something in it's place, but I would have to check into that.

Which of these 3 options would others do if they were in my place?


When the renter moves out, we will do a walk through and see how bad of shape it is really in with everything out of it. We did inspections on the duplex units before purchase, but the mobile home was thrown in "as is" so we didn't bother.