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.
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.
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.
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.
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.
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.
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!