Mobile Homes

5 (More) Things to Hate About Mobile Home Investing Inside Parks

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Why would any rational real estate investor waste his or her resources buying and selling used mobile homes? In a recent article titled “The Top 6 Reasons Mobile Home Investing Sucks,” we dove into some of the problems and reasons for mobile home investors to be concerned. Below we take a look at even more areas to be concerned with while investing in used mobile homes inside pre-existing mobile home parks.

5 (More) Things to Hate About Mobile Home Investing Inside Parks

Difficult to Rent

A high majority of mobile home parks around the country will not allow rentals, renting, or subletting a property within their walls. This means that the majority of mobile home parks will ask you to resell your investment mobile home to an end-user that will become approved to live in the park. While this is well and good if you sell via all-cash, bank financing, or payments, forget about keeping the home and renting it in most communities.

Related: 3 Bad Mobile Home Deals I Almost Fell For (& What I Learned by Walking Away)

Pro Tip: Mobile home communities located near military bases have a higher likelihood of allowing you to rent out your investment mobile home. This is likely due to the sometimes transient nature of our brave military men and women.

mobile-home-seller

Costly to Move

Have you ever wanted to take your home and move away from your current town or next door neighbors? With mobile homes and manufactured homes you absolutely have that choice; however, be prepared to pay for the luxury. Depending on your location around the country, the size of your home, and the total distance moving, you should expect to pay between $2,000 and $10,000+ to get your home moved and re-set up correctly.

Pro Tip: It may significantly increase or decrease the value of your mobile home by moving it to an area with a higher resale demand or lower resale demand.

Monthly Fees

The fees never end! When investing in used mobile homes in pre-existing mobile home parks, you will almost always have to pay a monthly or quarterly lot-rent or pad-rent fee for the right to keep your home in its current location at the community. Over time these fees almost always increase year after year.

While many parks are very realistic and charge a nominal lot rent fee for the use of their land, some communities around the country are very greedy and gouge their residents for top dollar and exorbitant prices; this leaves some homeowners between a rock and a hard place, as they are unable to afford the increasing monthly lot-rent dues and are unable to pay to have their homes relocated.

New Friends

Mobile home investing is certainly a real estate business; however, this is far more of a “people business.” As an active mobile home investor, you will become well known throughout local communities that you are involved with and help serve. You will likely become very well known by the local residents and community leaders as well.

Unless a mobile home investor chooses to go out of his or her way, making new friends and helping good people is simply a part of this business. While this can absolutely be the same with traditional site built homes, mobile homes inside pre-existing parks typically create a close knit community that gossips and shares information regularly.

real-estate-networking

Always Things to Do

As an active mobile home investor, there are always things to do. If you are not outsourcing your daily responsibilities, then you are likely the one performing all the duties required of a successful investor. You may likely have to act as inspector, marketer, negotiator, appraiser, financer, handyman, closing expert, landlord, etc. These duties and responsibilities take time to perform and effort to master; because this is a people based business, there are always more people to educate and help.

Related: 4 Due Diligence Steps to Take BEFORE Purchasing a Vacant Mobile Home

In conclusion, there are so many ways to make money and provide value within the scope of real estate. Make sure to choose a niche that gives you internal satisfaction through helping others, creating high value, and making a real difference in your local market. While we cannot help everyone, you can absolutely start by helping one family after another by educating them as to their options for selling or buying their next manufactured home.

If you invest inside of mobile home parks, would you add anything to this list?

Let me know with a comment!

Investing since 2002, John started in real estate accidentally with a 4-bedroom mobile home inside of a pre-existing mobile home park. Over the next 11 months, John added 10 more mobile homes to his cash-flowing portfolio. Since these early years, John has gone on to help 150+ sellers and buyers sell their unwanted mobile homes and obtain a safe and affordable manufactured home of their own. Years later, John keeps to what has been successful—buying, fixing, renting, and reselling affordable housing known as mobile homes. John shares his stories, experiences, lessons, and some of the stories of other successful mobile home investors he helps on his blog and YouTube channeland has written over 300 articles concerning mobile homes and mobile home investing for the BiggerPockets Blog. He has also been a featured podcast guest here and on other prominent real estate podcasts, authored a highly-rated book aimed at increasing the happiness/satisfaction of average real estate investors, and spoken to national and international audiences concerning the opportunities and practicality of successfully investing in mobile homes.

    John Bierly Developer from Bainbridge Island, WA
    Replied over 3 years ago
    If you want to avoid some of the headaches described try getting on the other side of the deal and invest in the parks themselves and not the individual MH. Realty Mogul has been offering a series of MHP funds to accredited investors over the past year which have typically been paying around an 8% preferred return (paid quarterly) with a projected 14-17% IRR over the term of the fund (probably 5 years).