Mobile Home Park Investing - What to Consider & What to Look Out For
Many factors influence the decision to invest in a mobile home park. They may not only serve as a residence for individuals, but they can also be quite lucrative businesses. They also have lower expenses and a greater chance of higher returns than other real estate investments. This makes them an appealing alternative for investors looking to put their money into the market.
However, as with any investment, there are a number of things that need to be taken into account before diving in. In this article, we'll outline some of the key considerations and concerns that need to be addressed when investing in mobile home parks.
What to Consider?
Evaluating Competition in the Market
One of the most important things you need to do when assessing a mobile home park is to look at the competition in the area. How many other parks are there in the vicinity? What kind of amenities do they offer? How much do they charge for rent?
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If there are too many parks in the area, it could be difficult for your park to stand out and attract tenants. On the other hand, if there are very few other parks, it could be an opportunity to fill a gap in the market.
Housing/Rent Rates of the Area
Another key consideration is the housing and rent rates in the area where the mobile home park is located. Are people looking for affordable housing options? Are there a lot of low-income residents in the area? If so, then a mobile home park could be a good investment. However, if rent prices are too high, it could price out potential tenants.
Land/Lot Value
The value of the land or lot on which the mobile home park is located is also an important factor to consider. Is the land zoned for commercial or residential use? How much does it per square foot?
If the land is zoned for commercial use, it could be more difficult to get the necessary permits to build a mobile home park. However, if the land is zoned for residential use, it may be easier to obtain the necessary permits.
Demand
Consider the demand for mobile home parks in the area. Are there a lot of people looking for affordable housing options? Are there many retirees in the area who are looking for a place to park their RV? If there is high demand for mobile home parks, it could be a good investment. However, if the demand is low, it may not be worth your time and money.
What to Look Out For?
Potential for Higher Returns
One of the benefits of investing in a mobile home park is that they tend to have lower expenses than other types of real estate investments. This can lead to higher returns on your investment. If the park isn't generating enough revenue to cover its costs, it's not going to be a wise investment.
Zoning Issues
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Zoning of the land is an important consideration when investing in a mobile home park. If the land is zoned for commercial use, it could be more difficult to get the necessary permits to build a park. This also means that there is a higher chance that your park will be competing with other residential properties for tenants.
Environmental Concerns
Another thing to look out for is environmental concerns. If the property is located near a toxic waste site or an airport, it could be difficult to sell in the future. Ensure that the park complies with all environmental regulations. If it's not, you could face fines and other penalties from the government.
Age of the Property
Another thing to consider when investing in a mobile home park is the age of the property. How well is it maintained? Are the roads and infrastructure in good condition? If the property is old and needs a lot of repairs, it may not be worth your time and money to invest in it.
Proximity to Amenities
Finally, you need to consider how close the park is to amenities such as grocery stores, schools, and hospitals. Is it located in a desirable area? If the park is located in a remote area, it may be difficult to attract tenants.
Start Investing Wisely
Mobile home parks can be a good investment, but there are a few things you need to consider before deciding to invest. Park Avenue Partners can help you determine if a mobile home park is a right investment for you. We specialize in mobile home park investments and have a proven track record of success.