Benefits of owning home parks in America
America is the land of opportunities. When we talk about investments, America has tons of possibilities and one of the best is to invest in real estate. One of the real estate business opportunities is home parks. It is estimated that 5.6% (17.7 million) of the population of America lives in home parks and the number is growing. These are great opportunities still unknown to many investors to invest money and enhance their investment catalog.
Lower maintenance and repair costs
One of the important benefits of owning mobile home park is that in most cases you have individuals that own their own homes and will tend to take care of the home as well as their lot. Since you are renting basically the land and the utility connections, there is not near as many things that your renters can do to cost you major repairs as usually happening in apartment rentals. You rent the land and do not have to fix leaky kitchen faucets or toilets. In general, the cost of maintenance and repair at mobile home park is incomparably smaller than the repair cost for an apartment building.
If we dive into the benefits of owning a home park, there are plenty. Let’s take a look.
The lower risk from an investment standpoint
From an investment standpoint, someone who owns a more significant number of units is at a significantly lower risk and is far away from bearing any considerable loss. So, the risk is spread out if you have more tenants. The owner of the Mobile home park owns land which is practically indestructible and the value of land historically is going up as there is a limited area of land on our earth.
Increasing demand
Mobile home parks are high in demand due to their lower purchasing and rental costs. In 2021. 66.9% of people aging between 64-75 years were retired. In a recent survey of 2021, the average retirement savings have increased by 13%, from $87,500 to $98,800. Many retirees tend to opt for a mobile home park due to its budget-friendly affordability.
Lower cost per unit
When investing in a home park, the cost per unit is drastically lower than investing in a large multi-family home. Typically, home-park owners own the land, not the units. Causing the cost to go lower than the units owned. Contrary to investing thousands of dollars in a home or an apartment, you have to spend a minimum amount per unit for a mobile park. Mobile homes are built out of assembly lines making them more budget-friendly. The life expectancy of a mobile home can be from 35 to 55 years.
Little or no competition at all
For investors who are not willing to step into competition with big enterprises, owning a mobile home park is the best opportunity. In a way, the chances of people moving towards home parks are always increasing. 75% of the owners tend to stay for a minimum of 5 years or longer, and on a larger scale, never expect to leave. This leads to a less tenant turnover; the cost for a tenant to move their home out of a park could be around $5,000 to $7,000. However, 98% of mobile homes will remain at the same location after the second year. This puts the investor at ease in finding new tenants.
