Investing In Mobile Home Parks vs. Apartment Buildings

One area in real estate that often gets ignored is mobile home investing.

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  1. Mobile Home Park Investments - Pros and Cons To Mobile Home Park Investing
  2. This may be because it's not as common as single-family homes or apartment complexes, but it still can be a lucrative and viable investment option. There are several benefits, and a few drawbacks to mobile home investing. And in this article we will highlight the main advantages of investing in mobile home parks against investing in apartment buildings.
  3. Mobile Home Park Investing for Beginners
  4. The first advantage to investing in a mobile home park is that often times the tenant actually owns the home. And instead of leasing out a building, you are instead leasing the land and the membership privileges and amenities that are offered in your park. While this may increase the chance of a tenant picking up and moving their home out of the park, it is a rare occurrence and does not happen often.

    On the flipside, on an average an apartment renter will stay about 2 years. Which, means there's a lot more turnover rate with apartment investing than there is with mobile home investing. In mobile home investing there is a much lower turnover rates simply because the cost to move the mobile home is far more expensive, and often times is the real link as to why the tenant will choose to remain where they are.
  5. How to Buy Your First Multi Family Small Apartment Building
  6. Secondly, you tend to have far less maintenance with mobile home investing then with apartment investing. This is because when someone owns their mobile home, often times they are responsible enough to take care of their own space. While this isn’t always the case, it's far more likely to happen than with apartment tenants. Plus, in a mobile home park there is much less common area to maintain, which will cut down on the cost of repairs and save you money in the end.

    Also, with mobile home parks you have accelerated depreciation. This is because when you invest in mobile parks you will have different tax advantages because it's a mostly land leased operation. And as you probably know, while buildings will go down in value, land does not. So, your depreciation with a mobile home park will be done over a shorter period of time as opposed to a longer schedule of depreciation that comes with apartment building investing. Thus allowing you to accelerate your write-offs.
  7. Mobile home investing also allows you to have an increase in profit opportunities. This is specially becomes the case when you're dealing with additional amenities were membership privileges. For instance, you can offer your tenants a shed or garage, custom additions, boat or RV parking spots, and several other things. All of these things can allow you to significantly increase your cash flow, as opposed to your typical apartment complex.

    Now, there are also a few drawbacks to investing in mobile home parks. For instance, typically you will find that there is far less traditional financing available. This is because the majority of banks our uneasy when it comes to lending on mobile home parks. So, this requires you to become creative and either invest your own money, or bring in a partner who will invest with you.

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