LEADERS IN THE DISTRESSED MORTGAGE MARKET
Investing in Mobile Homes
Mobile home parks provide affordable housing needed for the number of low-wage earners in the United States. A recent report released by the Social Security Administration notes that 38 percent of all wage earners make less than $20,000 a year. It is estimated that roughly 8 percent of the U.S. population, or 20 million Americans, presently live in mobile homes.
Benefits to Mobile Home Investing
Low Cost Per Unit
Mobile home parks allow investors to acquire more units for less money. It is the lowest cost investment per unit of any real estate asset class with potentially higher risk adjusted returns. Most park owners own the land, and not the units themselves. This means the cost of investment is typically a lot less in comparison to the number of units.
Low Cost of Repairs and Maintenance
Not only is it low cost, it's low involvement. The investor doesn't have to do anything! The owner of the mobile home is responsible for maintenance, updates, and repairs to their residence – not the landlord. While the mobile home park owner must account for upkeep of the park, it is significantly less than upkeep in an apartment building.
The risk of loss decreases with more units. When there are more tenants, the risk is more spread out. When an investor owns 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.
New mobile home parks are often not developed 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 incomes are retiring with little savings, and mobile homes are a good solution for the affordable housing deficit.
A huge expense for multi-family properties is tenant turnover. Cleaning the unit, tracking down a new tenant, and lack of income during vacancy, all greatly reduce the potential monthly income. Conversely, mobile home parks have low turnover because it costs the tenant thousands of dollars to move their home out of the park. Most mobile home park owners plan to stay for at least 10 -15 years, thus reducing turnover and risk.
Mobile home park investing is excellent for those investors who do not want to compete with the huge volume of investors looking for traditional real estate investments. Mobile home park investing is the best-kept secret in the real estate investment industry!