Mortgages & Creative Financing

Why We Have Continued to Invest in Mobile Homes with Land over Mobile Home Parks

Expertise: Mortgages & Creative Financing, Landlording & Rental Properties, Business Management
26 Articles Written

It seems like the debate between single-family residential and multi-family residential has existed for a long time over which niche is more profitable.

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Today, I would like to address this debate from the mobile home side and show why these small mobile home and land properties are a superior investment to mobile home parks in my area.

1.  Infrastructure

As the mobile home park owner, you are responsible for providing the water, sanitation, and gas/electric services (up to a certain point) to your tenants. If you have a park on city water and sewer, then the issues tend to be much smaller as the city does most of the work. Wells and septic systems are common in the parks we encounter but the park that we had under contract a year ago (fell through due to financing) had well water and a LAGOON for sewer services (picture a large rectangular hole in ground that is fenced off but very close to many of the tenants – it’s disgusting!)

We would have to perform monthly tests on the well water (the current owners were paying about $10,000 to test the water – definitely could have been lowered) and deal with the lagoon if any problems popped up.  Connecting to city services for water and sewer for this park would have been over $250,000 (100+ unit park).  I’m glad things worked out the way they did as we never felt comfortable buying a park with these utilities the more research we did.

If one of the wells on one of our single unit properties goes bad, then we are at most a few thousand dollars in the hole for a new well.

2.  Liability/Disasters

This is a continuation of the concept of not having all of your eggs in one basket.  It’s possible that your tenants could file a class action lawsuit for a variety of reasons but let’s go with the well water was contaminated.  Owning individual units in separate locations means that each situation is different.

Continuing this negative outlook, a tornado could come through and wipe out all of the mobile homes in your park.  Even if the homes are owned by the tenants, you have lost your income stream and must figure out a way to replace the homes.  (There is a income replacement insurance but even this has restrictions and will only last you so long.)

3.  Simple Economics – Decreasing Supply Leading to Price Increases

In the main county we invest in, town officials have not approved a new park to be built since the late 80’s.  Some parks have been bought up by land developers.

So, a lot of park owners think they are sitting on gold mines and are asking unreasonable prices for their parks.

It also doesn’t help that most of the mobile homes in these parks are park-owned.  Park owners inflate their park valuations using the rental income of the home (banks will only lend on the lot rental income of the park) and do not account for the large amount of maintenance and turnover that inevitably comes with park-owned mobile homes.

A couple of the parks I have seen on the market are classic cases of buyers overpaying and most importantly overestimating cash flow, which results in them trying to find a bigger fool who will relieve them of their misery.

Currently we are buying these single family homes at about the same or less cost per unit as many of the parks we have looked at.

4.  Higher Demand Results in Higher Quality Tenants

If you have read any of Frank Rolfe’s and Dave Reynold’s educational material on mobile home parks, you have probably heard them talk about how an abundance of mobile home with land properties are like kryptonite to mobile home parks.

The reason being is that for a similar cost of rent, a prospective tenant can live in a mobile home park surrounded by people on all sides or can have more space with a land-home property.  For us – we add another bonus of providing rent-to-owns for our mobile home with land properties, leading to a larger group of qualified buyers that allows us to choose who we want instead of the other way around.

5.  Fewer Inherited Tenants

This was going to be an issue when we were trying to buy that large mobile home park.  We require all of our tenant-buyers to pay rent electronically through and to convert all 100+ people over at one time who were used to paying by check or even by cash would have been incredibly difficult.

So far of the 15 buy-and-hold deals we have done, we have not inherited one tenant, which I really like because we get tenant-buyers whom we have selected and can set certain expectations that a previous landlord may not have.


I must say that mobile home parks perform much better in the appreciation category.

Especially using our business model, after 11-15 years, we expect our tenant-buyer to own the property, meaning that we no longer have any right to it.  The best park owners are simply renting out the land that continues to appreciate over time as supply continues to be restricted by local governments and bought up by land developers.

For us, we are willing to exchange future appreciation for short to mid-term cash flow.

So, which do you prefer?
Photo Credit: kenjonbro

Aaron Kinney has been investing in mobile home and land properties since 2011. He writes about this occasionally at and helps ...
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    Jon Klaus
    Replied almost 7 years ago
    I’d also agree that the tenant quality is better on home/land than in parks. My tenants are way better on average than what I could attract to a park in my area. And I’m getting way more rent than I could in a park. Average of $945/month. Also, the appreciation can go either way. I’ve tried to buy mine in the way of growth in the more desirable school districts and have seen decent appreciation.
    Aaron Kinney
    Replied almost 7 years ago
    Hey Jon, That’s an awesome amount of rent for a mobile home with land. In regards to appreciation, we sell ours creatively so we are losing out on appreciation (except in cases where we take the home back which is going to be most of them) but for investors like yourself who keep them as rentals, you are right about the nice amount of appreciation.
    Replied almost 7 years ago
    I like parks better. True, with single homes, all your eggs are not in one basket, but that means repairs, rent collection, and general keeping an eye on things are all spread out, too. Single mobole homes in our area with a little land run about $40K, while we just bought a very nice park and the homes were less than $11K each. They will rent for roughly the same as the single homes. As for water issues, I wouldn’t buy a single home with a lagoon for a sewer system or water quality problems, so why would I consider a park with such problems? As for inheriting problem tenants, you can do that anywhere. Our park tenants actually police each other, making our management job easier. As with any real estate deal, you take a mobile home park on it’s own merits and run the numbers. If it diesn’t make sense, don’t do it.
    Aaron Kinney
    Replied almost 7 years ago
    Hey Darla, That’s great that mobile home parks perform better in your market. Fortunately, there is not one strategy that is best for every market.
    Salvador Senar Jr. Real Estate Investor from Covina, Ca
    Replied over 5 years ago
    Appreciate this article, Aaron.
    Daniel Bear Investor from Price, Utah
    Replied almost 5 years ago
    Why do you decide to sell the mobile home with the land compared to just selling the mobile home, keeping the land, collect lot rent, and allow the land to appreciate?
    Spencer Anderson from Southaven, Mississippi
    Replied over 2 years ago
    That’s a good point Daniel! I am trying to do research on the same topic and haven’t found much so far. Are you in the mobile home side of investing?
    Karen Salem Investor from Palm Coast, FL
    Replied over 2 years ago
    You should consider keeping the land for appreciation and passive rental income.