Mobile home parks.

[RichardtheFrog]

If I choose to invest in a mobile home park, whether this be soon or at some point way in the future, do you think I should go with a park where I own the homes, or one where the tenants own the homes and rent the lot?

The latter has been suggested to me. What is the advantage to this, other than the cheaper upfront cost?

[Harold Mansfield]

I wouldn't invest in a mobile home park, mobile homes or anything related to owning mobile homes.
The value is in the land. Renting the lots. Mobile homes don't hold any value, do not appreciate in value, nor generate any equity. Why would you want to invest in something that even banks won't touch?

[Owen]

I wouldn't invest in a mobile home park, mobile homes or anything related to owning mobile homes.
The value is in the land. Renting the lots. Mobile homes don't hold any value, do not appreciate in value, nor generate any equity. Why would you want to invest in something that even banks won't touch?

Maybe he wants to start a bank that invests in mobile homes :P

[Harold Mansfield]

I have friends that live in a mobile home park and have done both, invested in purchasing other homes in the park for resale and for rentals. I watched their experience and trust their judgement that it's a loosing battle and that the real money in that particular industry is from renting the lots that the homes are on which are generally all owned by the park owner.

[RichardtheFrog]

So you're saying that I could just buy 2 acres that are properly zoned, hook it up to utilities, and say "okay, who wants to park their trailer here?"

And that might work? Do people actually do this?

I lived in a mobile home park. The owners owned all 24 trailers. They looked like they were all from the 1970s. All repairs that were the fault of the tenant would obviously not go against their profits. I see no reason why I couldn't keep a mobile home for decades. But also true that I've never done it before.

[Harold Mansfield]

So you're saying that I could just buy 2 acres that are properly zoned, hook it up to utilities, and say "okay, who wants to park their trailer here?"

And that might work? Do people actually do this?.

I'm sure there's more to it than that, but yes someone owns the land and it's not always the same person who owns the home. The homes are basically worthless, but land is rarely ever worthless.

[RichardtheFrog]

I wouldn't say the homes are worthless if even a 60x14 single wide can generate 6600 of revenue per year. ($550 x 12)

[Owen]

I wouldn't say the homes are worthless if even a 60x14 single wide can generate 6600 of revenue per year. ($550 x 12)

Mobile homes are not something to invest in my man. Talk to an accountant instead of internet strangers :3

[Wozcreative]

Mobile home do people actually stay in those long-term? Or will you have to constantly be looking for new tenants? :s... just like condos and basement aparmtnets here.. most people only live in the the place for about a year and leave. Then you may be stuck without rent for a month or two.

[RichardtheFrog]

Yea. Another idea I thought of is an RV park rather than a mobile home park. Especially since I live in Florida with a bunch of tourists.

[etobicoke_woj]

Hi Richard,
I've been lurking the forum the last few months and just recently signed up because your posts are something that I'm familiar with (landlord) and I would highly recommend AGAINST leaning towards low-income tenants, and mobile homes.

The reason I say this is that yes, they are also a source of income, and you can get the properties cheaper....however the quality of tenant is considerably lower than middle income / higher income tenant. These are also tenants who may cause the most damage, always be late on payment, cause you problems, and generally not take care of your property which will very easily eat up any type of profit.

Personally I would look for higher income tenants/properties, which will be tougher to purchase, but you will see a better ROI over the long term.

Also, in Toronto it's fairly difficult to evict a tenant for non-payment of rent...takes about 3-4 months depending on how you go about it. It's possible...but way more difficult than it should be.

G'luck.

[etobicoke_woj]

In addition to my post above, my personal experience in the first three days of this week were as follows:

- Monday - drain pipe from roof cracked due to age and had a water leak to 2 units (minor but still requires at least $1000 in repairs to drywall, insulation, and paint)
- Tuesday - found more wet insulation in one unit - tack on another $100-200 to add more insulation
- Wednesday - furnace gas valve failed in the morning and spent $500 in repairing it due to not having an HVAC license and not being able to purchase materials from the store

So these are the unexpected costs that you need to account for in your type of operation that you're considering. Add the fact that you want low income tenants, and you can see how the math may just not add up beyond the initial price of entry.

I am VERY fortunate that I have people I trust in my family that can help me with the above, but I also do not expect them to work for free, and materials need to be purchased. If you cannot do the work yourself due to either time, ability, or any other reason add more $ to the costs due to urgency...water leaks and broken furnaces on a cold day are NOT to be put off as you shop around. Tenants expect heat, water, and general standard of living to be maintained and the best tenant in the world will quickly become an enemy when the service they are paying for isn't provided.