Real Estate Investment Showdown: Mobile Home Parks vs. Apartment Buildings

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When I first got into mobile home investing, it was almost by accident. Up until then, I had only invested in single family residential (SFR) properties, and I was thinking about getting started in apartment investing as a next step. As it turned out, though, I was running a REI networking group at the time, and an outfit looking to raise capital to purchase a mobile home park reached out to me about presenting in front of my group. Later on, I decided to team up with them, mainly on the capital raising side.

Looking back, I see it as a positive experience. Not only did I learn a lot about raising capital, but I also learned quite a bit about the many advantages and disadvantages specific to this type of investing.

Overall, I think mobile home parks can be a valid investment vehicle that may benefit many real estate investors. Based on my experience, here’s how I think it stacks up against investing in apartment buildings.

4 Advantages of Mobile Home Parks Over Apartment Buildings

1. Lower Turnover Rate

With mobile home parks, it’s common that the tenant owns the unit itself, and what they’re really renting from you as the park owner is the land and any membership privileges or additional amenities you may offer. Although they could up and move their unit out of the park, it doesn’t happen very frequently.

With apartment investing, the average apartment dweller stays about two years, but with mobile homes, it can be much longer, mainly due to the cost associated with moving. It can be pretty expensive to move the unit out of the park, disconnect and reconnect utilities, remove and reapply aluminum skirting, etc.

2. Less Maintenance

Also, people who own mobile homes often feel more responsible for their space than the typical apartment tenant, and they’re more likely to maintain their own units. With much less common area to maintain as well, this certainly cuts down on repairs needed at the cost of the park owner.

3. Accelerated Depreciation

Mobile home parks also have different tax advantages since they’re mostly a land-lease operation where the land doesn’t go down in value but structures do.

Since there aren’t as many fixed structures to depreciate, certain improvements (such as roads and sewer lines) can be depreciated over a shorter schedule, as opposed to depreciating larger amounts over longer schedules as you would with apartment buildings. This enables you to accelerate your write-offs.

4. Many Profit Opportunities

Now, when it comes to additional amenities or membership privileges, this is really where you can start to increase your cash flow.

Maybe it’s by selling sheds or offering garages, custom additions, boat and RV parking spots, etc. You may even be able to negotiate deals with the cable company and offer it as a covered (included) utility for increased lot rent, thus increasing the value of the park.

4 Disadvantages of Investing in Mobile Home Parks

Now, although mobile home investing does have some advantages over apartments, there are also some pretty big challenges.

1. Lack of Financing

When it comes to mobile home investing, there is certainly less traditional financing available, as fewer banks like to lend on mobile home parks.

And so, creative financing, whether that be private/hard money or owner-financing, may be the more commonly used option. Although I’m fond of using creative financing, having less traditional financing available can be a challenge for someone who’s looking to sell a mobile home park, as they will likely have fewer buyer prospects.

2. Units Lose Value

The mobile home itself comes with a motor vehicle title, as it usually wears out and loses value faster that the average house.

For the park owner, older units could take away from the overall look of a park. This is why many park owners, especially if they own a more modern or high end park, may prefer units to be doublewides, have vinyl siding and shingles, etc.


3. Need for On-site Manager & Maintenance Staff

If you have a smaller park, though, it may cut deeply into your cash flow to have an on-site manager or maintenance staff. Also, if you have to bring in outside resources and contractors all the time, this can a big disadvantage because of the cost.

Given that, it may make sense to buy a park that has at least 100 units.

Also, even though it’s an added expense, on-site management may be able to help increase the value of the park through different community initiatives.

4. Highly Contested Development

Another way to improve the value of a mobile home park is to expand it, especially since the value is calculated by looking at lot rent (i.e. cash flow) and the cap rate of the park.

That said, expansion can be difficult, as development may be highly contested by the township. It’s much easier if the park is already zoned for expansion. It may also be cost prohibitive to develop a mobile home park as opposed to just buying an existing park.

After thinking through the advantages and disadvantages of mobile home park investing, I stand by my statement that this vehicle can be profitable for some folks. In fact, a buddy of mine who’s in the Accredited Investor group I run recently bought a mobile home park with a few partners, and he’s killing it.

As for me personally, I see both apartments and mobile homes as viable investment vehicles, but to be completely honest, I’m leaning more towards commercial assets that are easier to finance or refinance. These days, I’m less inclined to invest in an asset like a mobile home park with little traditional financing available either for the purchase of the park or for taking out your private equity investors later on.

So, what do you prefer? Or, better yet, what will be the next step in your real estate investing career (mobile home investing, apartments, commercial real estate, notes, etc.)?

Leave your comments below, and let’s talk!

About Author

Dave Van Horn

Since 2007, Dave Van Horn has served as president and CEO of PPR The Note Co., a holding company that manages several funds that buy, sell, and hold residential mortgages nationwide. Dave’s expertise is derived from over 30 years of residential and commercial real estate experience as a licensed Realtor, a real estate investor, and a fundraiser. As the latter, Dave has raised over $100 million in both notes and commercial real estate. In addition to his investments and role as CEO, Dave’s biggest passion is to teach others how to share, build, and preserve wealth. He authored Real Estate Note Investing, an introduction to the note investing business, helping investors enter the “other side” of the real estate business.


  1. Paul Moore

    Nice job. Though I am thoroughly sold on apartments, and investing all of my time and efforts there, I think there is one additional advantage for mobile home parks: Diminishing Supply. Unlike most other commercial assets, they aren’t making (approving) many more of these, and I think owners of these parks have that competitive advantage on their side.

  2. Randy Cooper

    Thank for insight and honesty on mhp
    Investing. As Mr. Moore pointed out on the lack of parks. In the SF Bay Area the land is worth so much more than the profitability you could make, that a lot of parks being sold
    torn down and replaced with housing tracts.

  3. Love the topic. I’m thinking about getting in for the very reasons you mentioned on the pro side. I really would like to talk to you about the financing if you have a chance.

  4. Amy A.

    CONs: Snob mentality and Government financing programs. I come from a family of mobile home dealers and the snob mentality against mobile homes is incredible! It used to be that mobile home parks were great for the poor because they could own something. It was a first step out of apartments and into home ownership. You could see pride of ownership in how they maintained their homes.

    Now, thanks to government financing programs like RD and FHA, the working poor are skipping the $50k mobile home step and going straight into a $150k single family home. These programs are not offered for mobile homes. If they can get financing, it’s only for homes newer than 20 years and with a higher interest rate and down payment.

    Many park owners around here are turning to renting out old mobile homes in their lots, turning it into sort of a multiunit. However, there are higher capex and maintenance costs than a multiunit, and the values of these homes go down even with a new roof, toilet, etc. Depreciation is real, not just a tax write-off. Add to that the cost of infrastructure maintenance, especially if you’re on a well and septic system, and the numbers are tight.

    Some senior parks are doing ok. They want to go to Florida in the winter so want an inexpensive place to stay in the summer. I hope the snob mentality doesn’t ruin this for the next generation though.

  5. David Thompson

    Thanks for your article. As a capital raiser, I’m currently supporting multi family apartment sponsors but over time would like to branch out and have mobile home syndication on my radar screen providing some diversification for my investor base. I like broad overall themes w/long legs. Paul Moore wrote a great book called the Perfect Investment which I’ve re-read a few times over the past month. If you have any recommended books on this area especially the big why, exploring the trends, ins and outs, be great. To me, what catches my attention is the “affordability” concept. In Austin, that continues to be a big topic, affordability as homes continue to rise in price. Apartments are great, but they don’t work for everyone. Seems like this has had a good history and more legs w/the affordability theme.

    • Dave Van Horn

      Thanks David!

      You may want to look up a few of the books mentioned on the recent BP Podcast Episode 208: “Buying 41 Units on Your First Deal + Mobile Home Park Investing with Jack Baczek”.

      In it he mentions two valuable books that I would also recommend:
      – Emerging Real Estate Markets by David Lindahl
      – 30 Days of Successful Due Diligence on Mobile Home Parks by Frank Rolfe & Dave Reynolds

      It’s also a good episode in and of itself.

      Best of luck!

      – Dave

  6. I don’t think this needs to be an either or debate….both are good options. Another way to make money in MHPs is to buy the homes when someone wants to move out (at a severe discount of course) and sell them to the new tenant worth seller financing, since they likely won’t get traditional financing on a used home. You make money on the deal and don’t have the responsibility for the home.
    I personally own a duplex, but a complex, a MHP, and storage units are ALL on my radar.

  7. Pamela Starnes

    Dave…Thanks for a great pros and cons look at a topic I am currently pondering myself right now. Like many multifamily investors, I think taking a look at MHP’s is attractive as good/great deals on apartments become more difficult to come by. Whether I end up branching out to MHP’s or not, getting educated on a different niche is always a valuable and interesting pursuit! Thanks again.

  8. Just for the record; There are several different kinds of mobile home parks. Starting with the most lucrative: #1-Weekly Rental Mobile Home Parks- the owner owns all the mobile and keeps them furnished with water and power. This is the highest maintenance but best money maker!
    #2-Monthly Rental Mobile Home Parks- the owner owns all the mobile homes, but doesn’t furnish them or turn on any utilities. Makes good money and their are many people who would rather rent in a park than rent a house out by itself.
    #3- Lot Rental Mobile Home Parks- I think this is what Mr. Van Horn was referring to. This does not make the money that the other types do, but, it’s much less maintenance which gives you more time to participate in the pissing contest on this site.

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