Mobile Home Communities - Why do we invest in them?
Lower Cost Per Unit
Most park owners own the land, not the housing units themselves which means that the cost of the investment is typically going to be a lot less in comparison to the number of units owned.
You can easily expect to pay $100,000+ per home or apartment unit versus paying as little as $10,000 per lot in a mobile home park.
Lower cost for repairs and maintenance
By not owning the actual homes that the tenants live in this means the homeowner is responsible for the maintenance, repairs, and updates for their residence, not the landlord. While the mobile home park owner is still going to need to account for the expenses of the upkeep for the park, it will most likely be significantly less than what they would pay for the upkeep of the homes.
Spread Out Risk
We own office and retail. When one larger tenant leaves our cash flow is affect dramatically. Because mobile home parks allow us to acquire more units for each investment dollar the risk for loss decreases. In other words: with more tenants, the risk is spread out and we don't mind if any one tenant chooses to leave. If one does choose to leave the cost to transport a mobile home and reinstall it in another park is $5,000-$10,000. Most tenants will not pay this expense to move their home.
The Demand is High
Single family home prices are climbing to historic levels, incomes for many Americans are not rising. The need for affordable housing is only getting stronger. Baby boomers on fixed incomes are retiring in record numbers creating a greater demand for affordable housing that will only continue to grow.
“Mom and Pop” Owners
Have you opened a new location, redesigned your shop, or added a new product or service? Don't keep it to yourself, let folks know.
The Industry is Still Evolving
Many mobile home park owners are now entering retirement age and this makes them interested in cashing out of their business.
The majority of these owners are not professional landlords and most often friends with their residents. Often times these owners face difficulties in raising rents, billing utilities, and installing new homes therefore adding new tenants into their parks. They also may not have been exemplary with operational standards letting the tenants accumulate trash, old cars, or debris on their lots.
This gives us the ability to buy the parks at a reasonable rate and then upgrade them and/or improve management, thus increasing the current tenant experience and attracting new, stable, long-term tenants.