Why Invest in Mobile Home Parks?
Mobile Home Parks are becoming an increasingly popular segment within real estate investing
And we know you might have a lot of questions about whether or not it’s a good investment for you. Is this a sustainable industry? What happens when we go into the next recession? Is the mobile home park industry too competitive?
Read on for the top reasons we believe Mobile Home Park investing is THE place to put your real estate investment dollars right now!
Affordable Housing Solution.
With 20% of Americans earning less than $20,000 per year, lack of affordable housing is a problem and mobile home parks offer a solution. Especially relevant with the current coronavirus pandemic which has surged unemployment over 22 million, the demand for affordable housing is on the rise.
Decreasing Supply, Increasing Demand.
There is a growing demand for affordable housing with a shrinking supply. There are approximately 44,000 mobile home parks of 4+ units in the United States– and every year about 1% of MHP are converted into other developments.
Recession Resistant.
In the event of a recession, rent compression is more likely to affect high-end apartments and single family homes, whereas lower-priced homes such as mobile homes should remain flat or potentially even increase due to increased demand.
Stable, Predictable Expenses
Maintenance costs for mobile home parks are approximately 5% of revenue as compared to apartment buildings, where it runs on average around 15%. This is because tenants are responsible for the maintenance and repairs of their homes as well as assuming their own utility payments.
Low Tenant Turnover
Residents own their own homes and the cost of moving their home can be expensive ($5-$10k), so tenant turnover comes out to be significantly lower than a traditional multi-family investment like an apartment building.
NOI Growth
Significant value-add through in-fill, bringing up to date deferred maintenance, introducing automated and energy efficient processes, rent increases, and improving the overall tenant living environment are all factors that dramatically increase NOI.
High Barrier to Entry
Due to the time-intensive data analysis and underwriting process that is involved for mobile home parks as compared to traditional multi-family investments, competition remains limited.
Mom and Pop Ownership
Of the 44,000 4+ unit mobile home parks in the United States, approximately 40,000 are run by mom and pop owners. Many of these owners are not providing quality living environments that residents deserve with neighbors and neighborhoods that they can be proud of. We are buying and renovating our communities to be ones that residents are proud to live in!