Real estate investing covers a broad spectrum; from commercial high rises and office spaces all the way to single/multi family residential. Though, somewhere in the middle, there’s a small niche that future landlords tend to overlook. This niche is devoted to mobile home park investing, which is simply another investment vehicle provided by real estate ownership.
As with any real estate investment, mobile home parks offer a myriad of advantages and disadvantages. Here’s some questions you should be asking before you invest:
Often misconstrued for RV’s, mobile homes (despite their name) aren’t really “mobile” in actuality — at least in the sense of being easily moved once they have been fully constructed.
The term “mobile” is applied to these structures primarily due to the way in which they are manufactured. After being fabricated in a factory, pieces of any individual mobile home are then delivered via truck or other freight service and assembled on site — unlike apartment buildings and residential homes which are built upon a solid foundation from the ground up.
RV’s are vehicles, which have wheels and can move locations at any moment’s notice. Mobile homes, on the other hand, are (for the most part) permanent additions to their given lot. This lot is typically a small part of a larger mobile home park — usually containing roads, water/sewage lines and other mobile homes for rent.
You’re likely wondering if investing in a mobile home park over a more common option — such as an apartment complex — is a smart idea. Well, the answer is yes, and here’s why:
Regardless of the shape of the economy, the need for affordable housing options has remained a constant. And, with over 60 million people in the world earning a household income of less than $20,000, that need could never be greater.
Mobile homes are a realistic, low-cost option for multi-family housing- with typical mobile homes in America starting at $500 per month for rent. Of course, high end mobile homes exist but are less common in today’s economic climate.
Contrary to popular belief, mobile homes usually demand a consistent tenant rate. Why? It’s simple: unlike an apartment or RV, mobile homes aren’t easy to just pack up and go. Your tenants are likely to see their mobile home as a permanent option for their family’s future and beyond, thus resident turnover is extremely low.
Multiple apartment complexes spring up each year in every major US city — creating a massively competitive market for netting tenants — though, with mobile home parks being part of a niche market, you’re less likely to run into any competition from other investors.
Keep in mind, there’s a reason why so few parks for mobile homes are developed each year: Many future landlords are discouraged when it comes to investing, due to it being difficult to acquire the proper zoning, permits/licenses and deal with other regulatory prerequisites.
While owning a typical apartment building, an investor can depreciate their property over approximately twenty seven and a half years. For contrast’s sake, owning a mobile home park — which usually entails performing maintenance to the park’s utility lines and roads — means depreciation can occur over just 15 years.
This is because the bulk of the maintenance required for a mobile home park are, in fact, improvements to land and benefit the investor with depreciation during the earliest years of their investment.
Attracting tenants to your mobile home park is actually simpler than it would seem.
Beyond being a more affordable alternative to an apartment or other low-rent housing (which should be one of your main selling points) living in a mobile home provides future tenants with a place to raise a family.
Furthermore, low-rent apartment complex’s are typically located in crime-heavy areas — which puts a tenant at risk of dangers like break-ins and mugging — and usually come with restrictions on pets, smoking and housing personalizations (changes to paint, doors, walls etc.).
At Roxbury Mill Properties, LLC We specialize in purchasing distressed homes, renovating and reselling. In this way we not only help homeowners out of difficult situations but also improve the community by providing affordable housing that attracts new homeowners to these neighborhoods.
Through our extensive knowledge of the business, our network of resources, and years of expertise, we are able to assist homeowners with a wide variety of real estate problems. We pride ourselves on working one-on-one with each customer to handle their individual situations.
With the ability to directly purchase homes and make cash offers, we can create an extremely fast, and hassle-free transaction.