The popularity of mobile homes, and particularly an increase in the number of mobile home parks, has really piqued the interest of savvy property investors, such as Lee Kort. These ventures offer a very different and unique investment opportunity with a lot of positives to take on board.
Let’s take a look at some of the key reasons why investing in mobile home parks makes sense, and why you should consider adding them to your portfolio.
Mobile Homes Are In High Demand
Currently there are about 50,000 mobile home parks spread across the United States. That’s massive. The reason is that mobile homes are in high demand, due to the fact that many people are downsizing their homes and moving into smaller places that are way cheaper and more budget friendly than a conventional home.
Mobile homes also present a more cost effective alternative for low income earners, whether they’re looking to buy or rent a home. Mobile homes are also a good choice for first home buyers as they are easier to get finance for.
All these mobile homes have to be situated somewhere, and mobile home parks is the answer. Demand looks like remaining very high, so it’s a sound investment.
Low Turnover of Tenants
Due to the fact there is such a high demand for mobile homes, this equates to a low tenancy turnover rate. Once people are in a mobile home, they’ll be reluctant to pack up and leave, simply because they know how many people are looking to move into mobile homes and mobile home parks.
A low turnover of tenants ensures a high return on investment on a consistent, month to month basis, which is exactly what investors are looking for.
Spreading the Financial Risk
A typical mobile home park will have anywhere from fifty to several hundred lots, with most parks being a hundred or more. If you own a mobile home park, essentially you’re spreading your financial risk over hundreds of properties rather than just one or two.
If something goes south regarding one of the lots, you still have all the other lots bringing in rental income. This means you’ll barely notice the hiccup as far as your bottom line is concerned.
On the flipside, if you own just one regular house and it sits vacant for a long period, you’re leaking money at a rapid rate with nothing to back you up.
Repairs & Maintenance Are Cost Effective
Although you have an entire mobile home park to run, the cost of repairs, maintenance and cleaning is really very minimal. Ideally you’ll employ the help of a park management team to take of all that for you, leaving you free to enjoy the results of your investment rather than having to be continually hands on.
Tenants are responsible for looking after their homes and lots for the most part (some tenants will own their mobile homes), so it’s really just the grounds and common areas that management/owners need to take care of.
There Is Low Competition From Other Investors
Most people interested in property investments have their sights fixated on regular housing and apartments. Many have never even considered the notion of investing their money in mobile home parks.
With way less competition around compared to the “regular” property market, you’ll find you’ll not only get first look in on an opportunity, but you’ll also likely get to buy in for a very reasonable price.
Rather than competing with an army of investors who all want in, you’ll practically have the arena all to yourself.
You Buy An All In One Investment Property Portfolio
This truly is one of the biggest advantages, as it really keeps things nice and simple. Rather than having dozens of properties all spread out in different locations, which can be a nightmare to manage at times, you have potentially hundreds of small lots all neatly contained and controlled within the one mobile home park.
Bring in an experienced management team to look after it all for you and you’ll discover it will be the most stress free investment you’ll ever make.
When you look at the positives, investing in mobile home parks makes sense on many levels.