For a long time, there has been a hidden gem within the real estate market, with almost assured profits – even during recessions and other times of uncertainty. Until the last ten years or so, this investment system stayed hidden to outsiders, due to many reasons, including – stereotypes, misconceptions, false narratives and more. What is this investment, and how can you become an investor?
The answer is simple – invest in mobile home parks! You can also invest passively in this business, which makes it such an easy investment option for those looking to diversify or consolidate their real estate portfolios.
Usually, when you research real estate investment opportunities, you are bound to find some common options: buying a house (to rent or to lease out), or commercial property (office building, warehouses or retail). However, you may not find too much information about investing in a mobile home park.
So what makes investing in mobile home parks so lucrative? How can you maximize your profit through this type investment? Here is a guide to help you navigate the world of mobile home park investing!
Proven investment potential
Over the last decade, some of the largest private equity firms and investment banks have been purchasing and acquiring numerous mobile home parks, faster than ever before, due to their high performance on ROI calculations. The unprecedented demand for affordable housing in the US, higher rate caps, and an ownership model that is on its way out, have seen investors take to buying hundreds of mobile home parks! Over the next ten years, older mobile home park owners will retire or sell out, and the mobile home market will consolidate further, as more investors will look to invest in rent-based real estate.
Proven resilience against recessions and inflation
Mobile homes and mobile home parks are affordable housing options that usually perform well in any economy, since there is always a growing demand for housing. In a strong economy, they provide minimum wage workers and laborers with a housing option that is efficient and easily available. During a lean economic period, they give many people affordable and accessible housing options. Add to that the growing housing crisis, and the fallout from the pandemic, and you will find that this is a market that is resilient, while being a cash cow!
High profit potential
Investing in a mobile home park is more affordable than investing in conventional brick-and-mortar housing. A lot of money that could be spent on building materials instead can go towards adding extra amenities to make it more attractive to potential buyers & renters. Operating at high profit margins, these assets can make money even in times of economic fluctuation. The number of these assets is also extremely limited, since zoning laws around the country make it increasingly harder to build one from scratch. The existing parks are therefore a commodity with increasing demand, but limited supply – making it the perfect profit-making asset.
Additionally, people who choose to live in these parks usually stay for longer periods of time than the average renter. Targeting older age groups can be very profitable, since most retirees have a fixed income that they are able to pay through the rest of their lives. Since moving a mobile home can be hard, they are likely to live there for a long time. Having a set-up designed especially for seniors can be extremely profitable in the long run.
The perfect passive investment
Investing in a mobile home park can be time consuming and money draining, if you don’t have all your affairs in order. Getting out of the business will not be as easy as selling stock, so once you decide to invest, you have to be able to put some time into the venture. You can buy a park yourself, if you have the management skills and proper foundation to help you fit right into an existing business, or you can partner with a mobile home park syndicator. You need a combination of skills in order to take over and revitalize an old park, so this may seem like it makes it a bad option for a lot of people without these abilities.
However, what makes investing in mobile home parks so lucrative is the fact that you can invest in one, without all the hassle of managing a park. By partnering with a mobile home park syndicator, you can contribute capital to a company that takes care of everything to do with the park. All you have to do is invest your money with them, and you can reap the rewards for as long as you want, without wasting time and energy, at almost no risk to yourself.
By doing this, you will gain access to deals, lower investment rates, better returns, and lucrative profit sharing ratios. You will also be able to have direct access to the people that actually control your investment, while reaping the tax benefits that come from owning these assets. In addition to this, most syndicators control a large number of parks, which helps to diversify your investment over more than one park. This means that if one or two parks aren’t doing well, but the others are, you will still be able to make a profit.
There you have it! One of real estate’s best-kept secrets is out of the bag! Anyone can invest in a mobile home park, as long as you have the resources, or you can find an experienced syndicator. Don’t miss out on this investment opportunity contact your local syndicator today!