Making wise financial decisions and choices when it comes to property investing requires a lot of effort, including all the analysis and dealings with people involved in the process.
Mobile home parks have proven to be a wise choice for investors as mobile home living continues to grow in popularity.
Let’s gain an insight into why you should choose mobile home parks over a manufactured home to add to your portfolio, as well as some of the things to check first before taking the financial plunge.
Why Invest In Mobile Home Parks?
One way to know that mobile home parks are worth the investment is to read up on investors who are already involved in the mobile home park business. People like Michael Scott Mobile Homes and many others out there.
Mobile home parks provide a plethora of rental income opportunities while also spreading the financial risk across hundreds of lots inside the park. Return on investment is very steady and regular due to so many residents paying affordable rent every month.
Investments like these make a lot more financial sense than tying all your money up in one or two properties. If these properties stay empty for any period of time, there is zero cash flow coming in and the investments end up being nothing more than a money drain.
If you purchase a mobile home park, it can be a hands-off kind of investment, as all you really need to do is hire the services of a reliable and experienced mobile home park management team to take care of business for you. This way you get to kick back, focus on other things and watch the rent money flow into your account month after month.
Mobile home living is a trend on the rise that looks set to continue. On the flipside of this, a lot of investors don’t even think about investing in these parks, as they’re too caught up in the habit of buying traditional houses and apartments to recognize this awesome opportunity.
Things To Check Before Investing In Mobile Home Parks
Before laying down your cash you’ll want to have a good look at the surroundings of any mobile home park you’re interested in buying into.
Apart from being affordable housing, many Millennials are choosing to live in mobile home parks that have great community facilities as well as pleasant surrounds, such as being situated on or near water (lake, river and so on).
The location can be a real selling point when luring residents into your park, so the more pleasant the surroundings are and the park itself, the more chance you’ll have of keeping park occupancy full.
Another thing to take into consideration is will the park require loads of time and money spent on maintenance and upkeep? While you definitely want a nice looking mobile home park, you also don’t want upkeep seriously eating away at your budget. You want to find some middle ground where the park is picturesque and has modern amenities, but is also fairly low maintenance.
Does the park already have a decent management team in place who can continue to look after and operate the park on a day to day basis after you acquire ownership? If you’re not happy with the way the current managers are doing things, then if and when you buy the park, you’ll need to release that management team and search for a new one to handle your affairs.
From a purely financial viewpoint you’ll need to way up whether the cost of acquiring the park will be offset with the amount of rental return you can get. Will it be a profitable investment long term, or is the asking price for the park simply too high for the figures to work in your favor?
You need to work out the cost per unit and then match that against the amount of rental income you can derive from each lot.
Mobile home parks are really a buyer’s dream at the moment. Because so many other investors fail to notice the opportunity, this means less chance of any bidding wars driving up the price. Instead, you can acquire a mobile home park for a very favorable price, virtually ensuring a positive ROI for many years to come.