Mobile home parks are unique real estate assets that can provide high returns with lower risks than other types of commercial real estate. This makes them an attractive investment opportunity.
Investors can find many mobile home parks for sale on listing sites like Reonomy. But it’s also possible to uncover off-market mobile home park opportunities.
1. Sense of Community
Mobile home parks are an excellent place for people to build a community. Since everyone owns their own homes in a mobile home park, so they have control over what is going on and the type of environment they want to live in. In addition, mobile home park owners can often provide amenities to their residents, such as a clubhouse and pool. This provides a sense of community that people may not find in an apartment building or neighborhood filled with single-family houses.
People living in mobile home parks can often form close relationships with their neighbors. This is a big part of why mobile home parks are popular for retirees looking to spend their retirement years comfortably and with people they know.
Small mom-and-pop operations operate most mobile home parks. These types of owners are great at running their businesses and taking care of their residents, but they can have some issues with keeping up with property maintenance and raising lot rents as costs go up. This is why some mobile home parks have a bad reputation, and getting bank financing to buy them can be difficult.
When buying a mobile home park, it is essential to conduct due diligence. This should include thoroughly reviewing the rent roll, owner’s records, and inspection reports. Talking with the current owners and meeting the tenants is also helpful. This will help you understand the business and the challenges that can occur.
Another essential thing to remember when investing in a mobile home park is to ensure that there is demand for this type of housing in your target area. If not, you will have difficulty getting bank financing, which may be difficult to sell.
2. Quiet
Mobile home parks offer peace many people do not find in neighborhoods or apartment complexes. Because mobile homes have individual yards, noise does not travel between homes as it does in apartments or an area crowded with houses. This can be a real plus for those who need an escape from the chaos of life in a more urban setting.
While many people find that living in a trailer park grants them a greater sense of peace, it is essential to remember that peace may also have some downsides. For example, because of the limited space available for yard furniture, plants, and gardening, residents might have to buy most of their food at the supermarket rather than planting their garden or starting a community vegetable plot. Similarly, because of the lack of space to accommodate large pets, some mobile home parks may not be the best fit for people with pet allergies or who do not have small children.
Another disadvantage of mobile home parks is that they often require more regular maintenance than other real estate types. While this can benefit some investors, it may not appeal to those who want a more hands-off investment experience. Additionally, because mobile home parks are so localized, they may not attract the attention of institutional buyers interested in other types of investments.
However, if you have the skills to successfully manage a mobile home park, it can be one of the most profitable investments you can make. Because these properties have more tenants per property than single-family rental homes, the risk for losses decreases since a freak incident that costs you $20,000 in expenses is spread out across a more extensive collection of units.
If you are considering investing in a mobile home park, we recommend doing as much research as possible. This includes talking to local brokers, visiting the sites, and reviewing the market data. Once you understand the market, you can start pouring as many deals into your deal funnel as possible. Don’t hesitate to make offers when you find a park that fits your criteria, as mom-and-pop sellers are often willing to take less than the asking price.
3. Affordable Housing
Mobile home parks are affordable housing options for millions of Americans. They are often the only reasonable way for many people to keep a roof over their heads. Unfortunately, this is changing as investors buy mobile home parks, raise fees and rents and evict people to turn them into luxury apartments or other land uses. This is happening across the country and is being accelerated by the government. NPR’s Chris Arnold reports.
Unlike traditional homes, it is difficult and expensive to move a manufactured home once it’s been placed on its pad. This can leave residents vulnerable to predatory landlords who allow conditions to deteriorate or charge excessive rent hikes. Some mobile home park residents are taking matters into their own hands and banding together to buy the land that their parks sit on. The nonprofit ROC USA says that over 1,000 mobile home parks have been accepted by residents and are now Resident Owned Communities.
However, it is essential to note that just because a mobile home park is in your backyard doesn’t mean it’s going to be the best investment. It’s critical to research the area and find a location where there is actual demand for mobile home parks, not just land that will be used for commercial purposes. Also, check that the current owner does not exceed the legal number of units per acre and ensure the leases aren’t too onerous.
Another thing to consider is that mobile home parks are often older and may require substantial repairs. The cost of these repairs will need to be considered when evaluating a particular park’s profitability.
As the economy recovers, the demand for affordable housing will continue to grow. Rather than continuing to put low-income Americans in expensive apartment complexes that they can’t afford, it would be wise for the federal government to loosen the exclusionary standards that prevent new mobile home parks from being built and allow existing ones to increase their rents to reflect increased expenses. Mobile home parks are a good solution for hardworking Americans who want a place to call home.
4. Convenience
Mobile home parks are near major roadways and highways, so residents don’t have to travel far for work or fun. They are also near restaurants, shopping centers, and entertainment venues. The location of these parks makes them convenient for people who work long commutes and those looking to move closer to their families.
Additionally, living in a mobile home park can save homeowners money on rent. It can also be an excellent choice for those remodeling their home and needing somewhere to live while construction takes place. It’s less expensive than renting an apartment and can be a perfect way to spend a few months making your new home exactly how you want it.
The convenience mobile homes offer is one reason they are such a popular housing option in the US. However, some drawbacks to owning or living in a mobile home should be considered carefully before making a purchase.
For starters, a bit of a stigma is attached to living in a mobile home. Some people believe that mobile homes are old, dirty, and crime-ridden. Thankfully, this isn’t always the case, and many mobile home parks are well-maintained and offer a safe, clean environment.
Another drawback is that reselling or relocating your mobile home can be difficult. Unlike traditional homes, you cannot get a mortgage on a manufactured home, and it can be hard to find someone who will take it. Additionally, it can be challenging to find a transportation company that will take your home on the road, especially if you are moving across the country.
Mobile home parks are an excellent investment option for those looking to own real estate without the hassles of owning a single-family home or even an apartment complex. Mobile home parks have some of the best returns of any real estate niche. This is why Frank Rolfe, co-founder of Reonomy, has written a series of books and boot camps on the subject.
