Should You Invest in Mobile Home Parks in California?
With a bad reputation from the media, and even more notorious tenants, landlords tend to stay clear of mobile home parks. But you know what? You’re losing out on unimaginable opportunities. Mobile home parks are getting quite popular in Europe, Australia, Africa and America. As more and more people are vying for affordable housing in Burbank, mobile home parks provide just the solution for tourists, vacationers, retirees and low income families alike. That got your attention didn’t it? Let’s go through the reasons why you should invest in mobile home parks in Los Angeles. And we’re not talking about mobile home units only, think big!
Investment Cost
As a landlord looking to invest, you must know that the cost of investment for single or multi-family homes is quite high. Mobile home park units are comparatively less costly, and the best part is, you can buy by the lot. So, where you can buy only one unit of regular housing, you can buy five to ten units of mobile homes.
Now, let’s expand that vision a bit more. If you have more money to invest then consider buying the whole park rather than just the home units. Allow others to move their mobile homes to your park and put the lots on lease. Kaching!
Risks
Remember, with every type of investment there is a certain percentage of risks involved. Mobile home parks have their fair share. Risks of tenants not vacating the rental home, hurricanes wiping out the housing units, and fire breaking out and consuming the whole lot are very real. This is because most of these houses are made from prefabricated materials which are light and not made to weather the weather, if you know what we mean. However, after the implementation of Manufactured Home Construction and Safety Standards, mobile home units can last for 50-100 years with proper care. The HUD code and the NFPA 501 are additional guidelines which help homeowners to minimize natural disasters and man-made risks.
Profits
The best part about mobile home parks is that there is pure profit whichever way you look at it. Like we mentioned earlier, if you buy just the land you get income via leasing. If you buy housing units along with it, you get rental income with the lease. Even if you minus taxes, it’s a continuous flow of sizeable amount into your pockets with lesser expenses as compared to single or multifamily housing units. Also, the problem with single or multi-family homes is that when a tenant leaves, there is always the loss of rent during the time you search for another tenant. You also have to pay ongoing maintenance cost of the property. Compared to that, there are no real losses in mobile homes.
Maintenance
Unlike single or multi-family homes, mobile homes are low in maintenance. If you don’t plan on putting houses on lease then all you have to do is maintain the park for quality, amenities and facilities. If you plan to invest in houses, and put them on rent, then that too is low in maintenance because each unit is quite small, self-sustaining and the renters take care of them themselves. Maintenance costs naturally scale down per unit which is comparatively low as compared to single homes or multi-family homes in the city.
Tenants
Now this is the most interesting factor in mobile home park investment. Most of the population that live in these parks are low income families, bachelors, retirees or vacationers. Apart from them, due to the high prices in real estate, more people are turning to these affordable homes too. The fact that they are rare considering zoning permit and designation of areas for mobile home parks, make them rare. The housing units are not easily available in the market which make them most coveted among buyers/renters. So, naturally you’ll get immediate occupation regardless whether you opt for lots in park leasing or rental homes.
So, now that you find the benefits of mobile home parks outweighs its downside then we’re sure you’re all set for buying one. Hold your horses, though. There are some things that you need to consider before going into this business. Yes, that’s right. Mobile home parks are a lucrative business now that property investors are slowly coming to realize it. To get into this business you need to first have a plan, budget, and profit margins. In Los Angeles, you also require a license as a mobile home dealer or mobile home retailer before you purchase your property. When all is set, then start hunting for mobile home parks by hiring a property manager in your area, or consult an experienced real estate company.
