5 Reasons Why You Should Invest in Mobile Home Parks
Mobile home parks are becoming an increasingly strong investment opportunity for investors looking to diversify their portfolio. They serve as an attractive investment for those wanting a property in high demand with low risk, great returns and low overall turnover.
Mobile home parks are also easier to manage because the tenants, and not the landlords, are responsible for the care and maintenance of the mobile homes.
Follow us as we dive into why mobile home parks are real estate’s best kept secret:
Low Risk, Good Return
Mobile home parks are typically priced at lower cost investment per space (unit) than an apartment building in a similar area. Also, the capitalization rate and cash on cash returns offered by mobile home parks are normally much higher than those offered by apartments in similar areas.
This means you can acquire more units for less money, decreasing your risk of loss and giving you a better return on your money.
High Demand, Less Competition
It’s no secret that there is a high demand for clean, safe, well-managed and affordable homes. Not only do mobile home parks meet those demands but they also have very little competition as well.
While the need for affordable housing continues to grow, new government zoning laws have made developing new mobile home parks difficult. This makes existing mobile home parks a great investment opportunity.
Mobile home parks are real estate’s best kept secret because they require very low involvement. Unlike other real estate investment properties where the landlord is responsible for the maintenance, updates and repairs of their residence, in mobile home parks the mobile home owners are responsible for maintaining their homes. This means that landlords have very little cost and responsibilities other than the upkeep of the park itself.
Tenant turnover is one of the biggest expenses in multifamily properties. Once a tenant leaves, the owner must spend time and money to clean the unit and find a new tenant. During this vacancy period, the lack of income can deduct thousands in potential monthly income.
Mobile home parks tell a different story. Once installed on a site, most mobile homes are rarely moved. This means you’ll likely never lose your cash flow from that mobile home.
Another great advantage of investing in mobile home parks are the tax benefits. The IRS permits multifamily property owners the ability to use a process called depreciation, which allows owners to deduct the cost of buying or improving a rental property. Depreciation distributes the deduction across what is considered the useful life of a property.
Ready to invest in mobile home parks? Whether you are looking to start your investment portfolio or diversify your investment strategy, we can help. At 100units.com, we analyze market conditions, trends and local competition to help you find the best multifamily investment property.