Urban vs rural investing, with land vs without

[Jason Connolly]

I'm just staring out with real estate investing (no deals just yet) but the more I learn, the more I like the manufactured homes niche. No banks necessarily, lower risk, great ROI and less competition. I have a couple of questions about the business hopefully the BP community can help me with.

1) What would you say are the major differences are between buying in a big city park versus buying in a rural location?

2) Should a first time investor buy a "with land" deal for a higher price or would you say it is better be able to spread your money across multiple deals by just buying the homes alone? 

3) Do you think that the city of Calgary, Alberta, Canada (where I currently live) is a good market to start in or should I look elsewhere?

Let me know what you all think, pretty much any advice on mobile home investing would be welcome, thanks.

[Thomas S.]

The Canadian market, Ontario at least, is entirely different than in the US. Homes are generally 10X the value of mobiles in the US. Parks are being bought up by corporate investors across the country, as with the US, making it difficult to find deals. Pricing up here is also higher and does not follow the US formulas.

A mobile on a it's own lot up here is basically a SFH. Somewhat lower in price but rent will also be lower. Maintenance costs higher than a SFH.

As with the US market it is preferred to own the land as opposed to owning the homes.

Parks are simply a unique market, and as with any investment you must learn your market. 

I prefer adult only parks, MHCs, as they are easier to operate, not necessarily more or less profitable. I would not invest in a trailer park but that is simply my own preference. I would recommend investing close enough that you can manage yourself, Ontario is not good for investing due to rent controls combined with the fact that tenants stay usually a long time. Most lot rents are under market and impossible to raise. Depending on where you invest the land may be worth more than the business making redevelopment more profitable. This may be the future of many MHCs in Ontario due to rent control.

Financing is also extremely difficult to obtain at least in my area. Banks do not want to take a chance on a market they have no interest in but you may have better luck out west.