What You Should Know About Investing in Mobile Homes During Fall & Winter Months
For many real estate investors, our businesses continue to operate and grow 365 days a year. While some investors do like to take a month off here and there, many prudent mobile home investors are staying active and continuing to grow their word-of-mouth reputation and businesses in their local markets year-round.
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In this article, we will discuss the importance of understanding your local mobile home market, local buyers, and local sellers. By the end of the short list below, you should have a much better understanding of your plan and mindset moving forward into the fall and winter months while investing in mobile homes and manufactured homes inside parks in the US.
Summer breaks are over, kids are back in school, and many of us have sunk back into our regular routines of day-to-day life. Based on experience the fall months tend to slow down slightly with regard to the amount of mobile home sellers and buyers active in the local market. With that said, there are still absolutely buyers and sellers in the market looking for nice, quality homes at a good value.
If experience teaches that the fall months begin to slow down a mobile home investor’s purchases and resales, then the winter months will typically prove to be the slowest months to resell a mobile home investment property. Likewise, many sellers will not even choose to sell unless it is absolutely necessary for them to move during these colder months. With that said, there are still absolutely some buyers and sellers in the market looking for nice quality homes at a good value.
During holiday weeks, you will notice that your normal advertising and marketing strategies may result in a drastic reduction of leads and calls. Specifically during the weeks of Thanksgiving, Christmas, and New Years, new calls from sellers and walk-throughs with buyers may virtually stop depending on your area. This is normal and to be expected.
Pro Tip: The start of the new year will typically bring more buyers and sellers into the market. Any mobile home you may be holding onto during the previous year will likely be sold in the first few weeks of January.
During the fall and winter months, we must compensate for this drop in potential buyers and tenant-buyers looking for a mobile home to purchase during these months. We compensate for this delay when making purchase offers to sellers by factoring an additional two months of lot rent and holding cost that may be paid by you while you are aiming to resell the property.
No matter the time of year you are aiming to resell your investment mobile home, it is critical to saturate the local market so that all potential buyers and tenant-buyers that are actively looking to buy will see your advertisement. In addition to making sure that everyone sees the message with your online and off line marketing, it is crucial that your price point and selling terms be attractive to a good majority of the population. Based solely on experience, when selling a mobile home at the correct* and accurate price/term, it should take no more than 20 serious potential buyers walking through your mobile home before one or two will want to purchase it.
*The word “correct” above is used to describe a retail selling price and selling terms that are win-win and satisfactory for both investor and buyer.
Pro Tip: As a mobile home investor, you may always wish to aim to resell any investment mobile home inside of a park in 30 days or less. When purchasing any investment property, it is crucial to know your exit strategy before you offer any purchase prices/terms to your sellers. Due to the fact that you understand the resale market of your area, you should already know what price/terms will allow this mobile home to be sold to a low-risk buyer in 30 days or less.
Winter Destination States
Some states around the country receive a large influx of mobile home buyers and mobile home residents during the winter months. Markets such as Texas, Florida, Arizona, New Mexico, Southern California, and other Southern states increase their populations during the winter months from Northerners wishing to retreat to warmer states for the winter. Depending on your state and depending on the local area, some cities and towns may actually see more mobile home buyers and sellers during these months. Inside these “winter destination” states, and all states for that matter, it is very important to understand the buying/selling supply and demand for your area during this time.
Winterizing a mobile home is the process in which a mobile home is prepared for sitting vacant during the winter months. It is important that any home you consider purchasing has been properly taken care of and winterized in the past as needed. A thorough inspection of the mobile home, any visible leaks, all water pipes, visual cracks, etc. should be explored before purchasing a mobile home in states with freezing weather.
In conclusion, there is more to mobile home investing than meets the eye. Keep in mind that you must recoup every dollar you spend while purchasing a mobile home, repairing the home, and reselling it before you see any profit. Please heed the above article and warning when purchasing mobile homes during the fall and winter months. Mobile homes can absolutely be very lucrative; however, they should be purchased a bit more conservatively due to the slightly lower resale demand during these months.
Mobile investors: What would you add to this discussion?
Be sure to leave a comment below!