A Quick Tip Guide on Investing In Mobile Home Parks

The drudgery of the daily grind can lead anyone to dream of alternative ways of making money. Among the ideas, investing usually strikes one’s fancy as an attractive venture. Unfortunately, the vision of working from home, being one’s own boss and a profitable ROI often stagnates in the dream phase.

“Who can compete in real estate investment, when giant, real-estate tycoons like Warren Buffet roam the market?” You might be tempted to think, “The startup cost would be too steep for me to even get a foot in the game.” But here’s a solution that is often overlooked. A cheaper alternative to investing in the expensive brick and mortar market is investing in trailer parks.

Here are 6 Benefits For Investing In Mobile Home Parks

1. High margins:

   Out of all the real estate niches currently, mobile homes have the highest capitalization rate of 7%-12%. They can produce a higher profit than brand new apartments in the bustling city.

2. Easy entry cost:

   Even though mobile homes are the most popular option for roughly 8% of Americans, very few are built every year. As more people enter working adulthood, making below $20,000 a year, the demand for mobile homes will increase. More demand with less production produces scarcity in the market. Simply put, mobile homes will become harder to find, which means their value will only go up.

3. Family ran business:

   Just like the good ol’ convenience store on the corner run by “ma and pa,” you can find the same situation in the mobile home park niche. A local family buys the land, builds some plots, and runs the park. Eventually, they decide to retire and sell. These are some of the best opportunities to for new investors, as you can usually buy the park at a lower price. You may not even need to take out a loan, since kindhearted ma and pa will often carry the financing!

4. Long term stability:

   Even when the renters in your park move out, it is still not a loss. Most people, when they move out of a mobile home park, will not take their mobile home with them. It could be the hassle or the initial cost of transporting a mobile home, but the fact is that an empty unit is still an asset. You can either rent it out or sell it.

5. Park opportunities:

   As of last year, the number of mobile home parks in America was roughly 50,000. Of those, only a fifth are professionally owned currently. That means there are about 40,000 parks that are waiting for a small investor to snatch them up.

6. Large equity purchases:

   In some cases, a whole mobile home park can be purchased for as little as $400,000. If the park has 35 lots, you essentially have 35 independent properties to rent. Those numbers are much better than investing in two or three traditional houses!

Here is a very simplistic breakdown for example:

• 1 Park w/30 Lots: $500,000
• Current Median For Monthly Rent: $870
• Potential Earning: 30 x 870 = $26,100/month

As you invest more into your mobile home park, you can also increase the monthly price of rent. Some non-professionally owned mobile home parks have dirt roads, poor wiring and piping, and shoddy amenities. Previous tenants will appreciate the improvements, and newer renters will want in for the quality facilities you provide.