Are Mobile Home Parks a Good Investment?
Updated: Aug 25, 2019
Mobile Home Parks are increasingly looking like a great investment opportunity across the country. There are a number of reasons for this. Before we really dive in, let's chat about the basics of a mobile home park.
First, when you invest into a mobile home park, you will purchase the park in its entirety and rent out the land to the residents. You typically wont own the actual mobile homes themselves, just the space they sit on. So, looking at it from a investors standpoint, you wont be liable for any damages that happen inside the homes.
LOWEST COST PER UNIT
Mobile Homes have the lowest cost per unit of any real estate asset class. For example, you could spending hundreds of thousands for a single family home or apartment, but only spending ten thousand for a mobile home. As well as a low per unit cost, it also is one of the lowest costs for repairs and maintenance. This of course depends on how nice your mobile home park is.
Building a community center with a pool and spa are great benefits that will attract more residents to the park. However this will increase your repairs and maintenance. If you're investing into a mobile home park strictly for the land, then maybe a community center isn't needed. This in return will decrease your space rent monthlies and in turn generate less revenue than a nicer park would.
Due to the high cost of moving a mobile home, you will typically have low turnover. Tenants don't want to spend thousands to move their home. Most mobile home park tenants will stay for about 5 years. This is great given your upkeep on the park and increasing your community moral. An easy way to get your tenants out of the park is by bad management. Here is an article which can explain some good practices of property management: https://sierrasandiegomobilehomes.com/property-management/
WRAPPING IT UP
Mobile Home parks can be a good investment if you're in it for the right reasons. There are plenty of facts and statistics to know that owning a mobile home park is beneficial. However, making sure that you are staying on top of your management and fair rental fees will be the differentiating factor. Don't just come into the industry to make money, but instead think about it as building a community that you yourself would live in.