• Virgil Nethercott

Why You Should Invest in a Mobile Home Community

Mobile home communities are excellent investments in today’s market. A lot of investors are now betting their money on the last unsubsidized housing option in the country.


Seeing the competitive advantage to the housing market and the fact that there is more demand than supply for mobile home communities, it's easy to see why investors are attracted to these investments.


Additionally, many other reasons make mobile home communities a desirable investment:


Dependable Cash-Flow


Despite how the name confuses many people, mobile homes are not very mobile.


Once people place their mobile homes in a park, they rarely leave. It means that if you fill most of the lots in your community, you can realistically count on a set amount of rent every month.


One of the reasons behind this is the high cost of moving a mobile home. It can easily cost you around $5000 to move a mobile home. It is way more than a year's lot-rent in most mobile home parks. So tenants tend to stay in the community as long as they can, even if lot rents are rising.


Less Risky


Let’s say you own five apartments. Even if two of them are empty, you are only getting three-fifths of your ROI (return on investment) in the housing market.


However, if you buy a mobile home community, using the same amount of money you used to purchase those apartments, your ROI will fare much better.


Even if you have twenty empty lots on a 100 lot mobile home park, you might be getting more out of your MHC investment than those apartments. This is simply because your investment, and consequently, your risk is more spread out, thanks to a larger number of units you own.


Supply and Demand


Thanks to most cities’ zoning codes and restrictions, very few new mobile home parks are being built. A few of the latest mobile homes in the market are much more expensive than older mobile home parks.


So most of the prospective tenants try to find a lot in older MHCs. The demand for more affordable lot rental is very high compared to the supply.


The reluctance of local governmental bodies to allow the construction of affordable new mobile home parks might keep stretching this demand and supply gap in the investor’s favor.


Low Maintenance


Owning any type of property means being responsible for its maintenance. When you own a mobile home community, you are only responsible for the land and the community’s common areas.


The houses themselves will usually be the responsibility of the owner. When the tenants occupy the lot, they will be responsible for their mobile home's maintenance and a specific area around their mobile home.


You usually won't have to deal with the hassle of constant repaints, plumbing issues, and HVAC problems--things that you would have to take care of as the owner if you owned a house or an apartment that you rented.


Conclusion


Many prominent players and investment firms have now started taking a serious interest in mobile home parks as an investment.


There are still many excellent mobile home communities on and off the market if you can go through the trouble of finding the right one. If you do, an investment in a mobile home community can prove to be very lucrative.


If you are interested in finding a mobile home community investment that’s the right fit for your portfolio, please reach out to me at office@virgilbrooks.com, through our contact page, or by calling our office at (208) 932-2821. I’d be happy to help you find a suitable investment.


-Virgil Nethercott, CCIM


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