Real Estate Investments – Mobile Homes

With hordes of experienced and would-be  investors in residential real estate chasing the obvious; single-family, and multi-family dwellings, for example, and looking for lucrative deals in foreclosures, short sales, fixer-uppers, and the like, it seems obvious that expected profits in these investments are not as easily gained as in the past.

An extremely tight credit market has made mortgage loans, even for qualified borrowers difficult to get, and marginally qualified borrowers are for the most part shut out altogether. What this means to the investor is that there is a lucrative opportunity to focus on the rental market sector.

Mobile home parks can be an attractive investment alternative to apartment complexes, condos, and single-family home rentals. For example, since mobile home rents are considerably lower than most apartment complex rental fees, the mobile home market fills a much-needed niche for affordable housing.

Mobile home park owners have less responsibilities overall than apartment landlords, since the tenants that own their mobile homes are just renting the lot space and must take care of their own maintenance and repairs.

As a mobile home park landlord, the owner is responsible for the park facilities such as access roads, landscaping, and keeping the park presentable overall. Certainly, there are property taxes, insurance, and utility fees for common areas, and the cost of hiring a property manager, unless the owner is a hands-on kind of landlord. But these overhead costs will eventually be absorbed by rental income.

Additionally, the mobile home park owner has considerable leverage in ensuring rents are paid on time. If a park tenant’s rent is delinquent, or he/she is considered a “problem tenant” for one reason or another, the owner can demand that the tenant remove the mobile home from the park.

Moving a mobile home can be quite expensive, and finding a suitable relocation can be very difficult, since the number of available mobile home parks has declined considerably nationwide.

If the tenant abandons the home and just leaves, the landlord can file –under the prevailing state laws – for an abandoned property title. Receiving title to the mobile home will allow the landlord to lawfully sell the home to a buyer who will most likely settle in the home and pay the landlord a monthly rent.

Ownership in a mobile home park will create significant cash flow over time, and for that reason, asking prices for mobile home parks can be quite high. But if an owner is willing to sell, creative financing can often be the answer to an amicable agreement.

Certainly the astute investor understands that mobile home park ownership is not a “get rich quick” enterprise, but is, instead, a systematic approach to long-term wealth. Approach the concept of investing in this housing sector with the right perspective, and the monetary rewards will be there in the long run.

Real Estate Investing