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Real Estate
Why You Should Invest in Mobile Home Parks
July 4, 2020
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If you are looking to invest your money in a profitable real estate venture, a mobile home park is a good option. It is estimated that roughly 5.6% of the U.S. population is living in mobile homes and the numbers are increasing every day. As the demand of mobile parks is increasing with each passing day, investing in this real estate class seems really beneficial.

4 Advantages of Investing in Mobile Home Parks

1.     Low Cost per Unit

Mobile home parks are extremely affordable. They have one of the lowest per unit costs for cash flowing real estate.

How so?

Let’s say that you bought a 6 unit apartment complex for $1M; the cost per unit/apartment would be about $167,000. On the other hand, if you invest the same $1M in a mobile home park, divided into 100 lots to rent out, each slot will cost about $10,000; saving a lot of your money comparatively on a per unit basis.

Moreover, since you don’t have to invest in the physical structure on the piece of land, you can actually earn a handsome amount of money by just renting out the piece of empty land.

2.     Low Risk

In addition to low cost, the ownership of mobile home parks also ensures a low risk. As you own a bunch of units, the risk is widely spread out across all your units and minimizes a huge potential loss.

For example, if you have 5 tenants on your land and one of them leaves, you lose a huge portion (nearly 20%) of your income. But, when you have 50 mobile homes on your park and one of the tenant leaves, your income is reduced just by 2%.

3.     Low Maintenance Costs

Another advantage of owning a mobile home park is its maintenance cost. Since you are the landlord and not the owner of the mobile home, you actually are not responsible for any repairs, which means that you don’t have to pay a penny for the maintenance.

However, being the owner of the land, you are responsible for the upkeep of the park. From cutting grass to maintaining the roads, it’s all your responsibility to do.

Then again paying for cutting grass and shoveling snow is significantly less than the maintenance of dozens of homes.

4.     High Tenant Demand

As housing costs are getting higher and higher, more people are looking for affordable options to live in. And what could be more affordable than living in a mobile home? Well, nothing. As tenants don’t have to buy the land themselves and build a house, their initial home set up cost is much lower and that’s why they are more interested in mobile homes than buying or leasing apartments.

Because of the tenants’ interest, the demand for mobile home parks has skyrocketed in the recent years and proved to be an excellent investment.

Wrapping Up

Mobile home parks are a profitable venture, but invest your money wisely, since all ventures bear some sort of risk.

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About author

Richard Nevis

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