Did you know that it’s estimated that roughly 5.6% of the U.S. population—17.7 million people—presently live in mobile homes? Demand is high, and the commercial real estate community is taking notice.
Between their low maintenance, high returns and overall affordability, there’s a strong argument for investing in a mobile home park.
In general, a mobile home park owner simply rents out small pieces of land to others. Investors can purchase the entire mobile home park and lease each pad to residents that either rent or own a mobile home.
Not only are mobile home parks in demand, but they provide clear returns. So much so that mobile home parks have the highest cap rate of any real estate niche, at roughly 7-10% nationally.
There are a number of other benefits that come with investing in mobile home parks, no matter what market they’re in.
Low Cost Per Unit
Mobile home parks allow you to acquire more units for less money. It’s the lowest cost investment per unit of any real estate asset class.
Low Cost of Repairs and Maintenance
Not only are repairs usually affordable but investing in mobile home parks usually requires a low involvement.
Investing in mobile home parks is a lower risk decision. The risk of loss only decreases with more individual units. When you have more tenants, the risk is more spread out.
When you own a large collection of units, the high cost of occurrences, such as eviction or random expenses, are spread out across a large portfolio and are less of a hit.
As we mentioned earlier, demand for mobile home parks is high. But new mobile home parks aren’t being developed often due to government zoning changes.
This means the demand for mobile homes in well-managed parks is increasing as the need for affordable housing continues to grow. Baby boomers on fixed income are retiring with little savings, and mobile homes are a good solution for the affordable housing deficit.
Mobile home park investing is also great for investors who do not want to compete with the huge volume of investors looking for traditional real estate investments.
For more information, contact Jeffrey Cook at 585-233-4699 or email email@example.com.