Are Mobile Home Parks A Good Investment Option?

The term “mobile home” is a bit of a misnomer. In fact, mobile homes are barely mobile at all. They are manufactured housing units built in a factory and transported to a particular plot of land. It can cost upwards of $5,000 to move one, so once the home is set down it’s pretty hard to up and move it to another location.

Can it be done? Yes.

Is it easy to do and, by extension, are your tenants likely to move their home right off your land? No.

A mobile home park (MHP) is a community of mobile homes. A MHP owner owns the land where the mobile homes are situated. The mobile homeowner owns the home itself and pays a lot fee to the MHP to be able to stay on the land.

BENEFITS

The big positive in MHP ownership is that the park owns the land and possibly some facilities on the land (office, laundry, etc.) but generally the MHP tenants just pay a lot fee and own their homes. If there’s a toilet issue in the home, that is the homeowner’s responsibility.

Another MHP positive lies in the fact that the homes are not very mobile at all. As a result, an MHP provides a very stable rental base. Once a tenant has moved his home to a mobile home park, it will not be very easy for him to up and leave. Most mobile home parks tend to be very low-rent housing options and many of the residents who live in them will have a very challenging time being able to come up with $5000 to move. Thus, mobile home park residents tend to stay a very, very long time — usually more than ten years. They also tend to have more pride of ownership because they own their homes, which is good for your property values and the level of maintenance you may be required to provide on a regular basis.

DOWNSIDES

The downside is that most mobile home parks tend to be very low-income housing and these parks often have the same problems associated with the lowest income areas of any town: crime, drugs, and inability to pay even the lowest rents. The parks may end up requiring very intensive management. However, as in all property investments, the better the management, the better the results.

About Monick Halm

Monick Halm, founder of Real Estate Investor Goddesses, is an educator and advocate for female real estate investors, Her mission is to help 1 million women achieve financial freedom through real estate investing. To find out more about Monick and connect with her, go to www.reigoddesses.com.