An Introduction to Mobile Home Park Investing

A broad definition of real estate investing includes everything from single- or multi-family homes to commercial high-rise office buildings. Mobile home financing is a less well-known niche specialization that falls somewhere in the centre. Mobile home park ownership is only another investment option made available by real estate ownership, one that many real estate investors frequently disregard.

Different types of mobile home park ownership:

Let us start by defining what it means to be a mobile home investor. Ownership can have two different forms:

  • One type of ownership has the investor becoming the owner of the lots that make up the individual houses and the surrounding land, including the streets, utility infrastructure, clubhouses, swimming pools, and other amenities. In this type of ownership, the tenant is the only property owner and only pays for the privilege of using the facilities and the right to occupy the land where their home is situated. When you invest in parks instead of mobile homes, you are investing in the latter.
  • The other sort of mobile home ownership is the investor owning both the physical homes as well as the property. Like renting an apartment, the renter is responsible for paying for the home’s rental and the land’s use.

Why invest in Mobile Home Park?

  • Tenant reliability:

It is a common misunderstanding that renting out mobile home parks is less stable than renting out typical multi-family properties. The phrase mobile home is misclassified and manufactured home is a preferable term. These homes aren’t mobile because commercial mobile home parks for sale can be moved quickly, and they are made in a factory before being delivered to the intended location. Additionally, research has revealed that most mobile homes are still in the same area. Mobile home ownership has low resident turnover, and many homeowners can switch on their engines and leave apartment buildings.

  • Opportunities for low-cost housing are in greater demand:

There will always be a demand and need for inexpensive housing solutions, regardless of the economic cycle. According to the government’s recommended income-to-housing costs ratio, the nearly 60 million people whose household income can only afford to spend an amount for housing. When considering their possibilities in this market at that price, they are left to decide between a mobile home park and an apartment building with low rent.

  • New developments in mobile home parks pose little competition:

Competitors that want to build a new mobile home park from the ground up face severe entry restrictions. It is challenging to secure the proper zoning, obtain the required permissions or licenses, and cope with other regulatory prerequisites in most countries. Along with the legal limitations, commercial mobile home parks for sale must wait until a significant portion of the park’s home lots is rented to break even or start generating cash flow.

Summing it up:

From the above mentioned, the mobile home park can be a great investment option if it is focused on offering cheap housing. In the end, tenants prefer mobile homes over low-rent apartment buildings because they offer a more excellent quality of life. Owning a mobile park provides investors with a solid rental demand and a strong potential for a steady cash flow investment.

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