Are You Considering Investing in Mobile Home Parks? Read This
You must have heard from
many people, multiple times, that property is the best investment. It is true
that the value of property assets escalates like no other. As an investor,
there are multiple options available to you like single-family
homes, multifamily properties, and even mixed-use investments. One of
the most talked-about investment options in real estate is mobile home parks.
When you invest in these, you are actually buying land to rent it out to mobile
homeowners for a monthly or yearly payment. Basically, you own the land and
they own the residential vehicle they live out of. There are many pros and cons
of this investment option, just like any other. Before putting in your money, find
out what these are:
Pros of mobile home park investment:
Lower cost: If you purchase a
property like home of office space, the price will include the cost of
construction of the structure. While investing in a home park you ae
essentially paying for the land, which will cost you less than a flat or an
office space occupying the same area. Thus, the rent you earn will give you a
better return on your investment than a built-up property.
Repairs and maintenance: As landlord of the
park space, you are responsible only for repairs and maintenance on the actual
land. This includes cutting the grass, shovelling snow, garbage removal or
maintenance and repairs on a communal structure like pool or clubhouse. The
owner of the mobile home will pay for all the repairs and maintenance of the
home. The services you have to pay for are less than home repair services thus
making your end of the expenses lighter.
Low turnover: When a tenant moves
into your mobile park space, they are essentially moving an entire home into
your space, compared to moving onto a flat where they just have furniture and
clothes. Moving out an entire home is far more difficult, making tenant
turnover less in case of mobile home parks. This makes it a hassle-free option.
Cons of Mobile Home Park
Investment
Repair battle: If any homeowner does
not keep the space well maintained, the entire park could look rundown and
discourage new tenants. This can be bad for your business. While there are
agreements in place about maintenance, it can be a real struggle to make
tenants comply with them.
Area-specific demand: Certain parts of the
country may have better weather conditions and landscape suited to mobile
living. It is important that you ensure whether your plot is purchased in such
an area, otherwise the demand is going to be low given mobile living is a niche
market to begin with.
These are both sides of
the coin that you need to weigh before putting your money on mobile parks. Read
carefully to understand what works for you, and decide accordingly.
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