Hottest US Markets for Mobile Home Park Investing

“Buy low, sell high” is the classic motto of investors everywhere. However, with real estate investing it can be even more important to look for where the hottest markets are when you are ready to plunk your money down. If you can get ahead of the pack and find the hottest markets for mobile home park investing, then you can cash in big. 

Here’s a little secret that you might not have realized: As an investor interested in mobile home park investing, you have a huge advantage over the competition. Why? Because traditional investors tend to overlook the power of investing in mobile home parks. Perhaps it is because of long-lasting stigmas about mobile homes or simply because they are uninformed. Whatever the case may be, you should be eager to take advantage of this untapped market. 

Every investor must decide for themselves which basket of investments are right for their portfolio. However, when you speak with most experts on the matter, they will tell you that it is undoubtedly true that real estate is generally considered a safe investment as it is known to weather economic storms better than most. After all, people always need a place to live. 

Are you looking to expand your investment portfolio into the realm of mobile home park investing? If so, then you need to know where the hottest markets for mobile home park investing are and what makes them so appealing. We have compiled that information for you. 

What Characteristics Make for a Good Real Estate Market?

When a particular geographic area has certain characteristics, it is much more likely to be a good real estate market for investors. Among the factors that make a market healthy include the following:

• Affordable Investments – It doesn’t matter how hot a market is, you still don’t want to overpay for the mobile home parks that you invest in. You still need to scoop them up at reasonable prices to earn the kind of returns that will build your portfolio. 
• Strong Local Economy – What does the economic picture in the surrounding areas look like? Are the local people mostly employed and spending money? If so, then you might have uncovered a hot market for investing. You need the economic activity in the area to be strong because you need the local people to have money in their pocket to pay their mobile home park lot rent. 
• Demand for Affordable Housing – Throughout most of the country it is fairly typical for demand for affordable housing to be relatively high. However, you need to verify that this is the case. If most people in the area can afford more expensive housing, then they may be less likely to be interested in renting a mobile home park space from you. If the median home price is $60,000 then you might have a hard time selling mobile homes when your customers can afford to go out and buy a single family home.
• Plenty of First-Time Home Buyers – When a market has a lot of first-time home buyers, it means that there are a lot of people who are looking for entry-level housing. This is definitely not the only category that mobile homes fall into, but it could mean that there is probably enough demand to for affordably priced housing. 

These are the kinds of things that you need to identify in any market before you open your wallet and start throwing money at it.

What Makes Mobile Homes Such an Attractive Investment?

One might easily look at a healthy real estate market and ask themselves why they ought to specifically invest in mobile homes. Why not simply invest in traditional housing or some other asset? Indeed, it is important to think critically like this and try to determine the best possible strategy. 

There are many upsides to investing in mobile home parks that you don’t necessarily get with other real estate investments. Among the advantages to investing in mobile home parks include the following: 

• Reduced Operating Expenses – Those who own and operate apartment buildings are often strained by their operating costs. They tend to have a 50-60% expense ratio that eats up a significant amount of the would-be profits. The operating expenses for mobile homes are much lower, hovering around 20-40% of gross income depending on park infrastructure. Therefore, mobile home park investors can earn a significantly higher return on their investment simply because they don’t have to spend as much on operating expenses.
• Increased Rent Can be More Easily Absorbed – A mobile home park landlord can justifiably raise rent by a small amount each year and not fear that they are going to lose many tenants. After all, most tenants would rather pay a small $10-$20 increase in rent per month rather than move their entire home to another location. They will absorb the cost and the landlord will collect higher rents. 
• Barriers to Competition – It is not so easy for competitors to move in and compete against your mobile home park. The zoning regulations alone make this a challenging prospect for any would-be competition. Once you have laid down your investment roots in to a mobile home park, you can reasonably assume that you will be mostly shielded from competitors trying to step into your turf.
• Residents as Stakeholders – Another advantage to mobile home park investing is that your residents will essentially become stakeholders in the mobile home park itself. They are renting the land and the utility connections, where they can’t really cause much damage that you will be personally responsible for. Besides that, they don’t want to cause any damage because the mobile home park is quite literally their home, and they will want to keep it as well kept as possible. This alone can account for some of the decreased operating costs of mobile home parks compared to apartments and other housing options. 

These are other great reasons to consider an investment in a mobile home park over other potential real estate investments.

Where are the Hot Markets in the United States Today?

As a very basic rule, I look for markets with strong demand for affordable housing, such as areas with high employment or population growth. A great website for analyzing economic trends and demographics of an area is Bestplaces.net. I like to look for metropolitan areas that have populations of 100,000 people or more, a high median housing cost so I’m not competing with single family homes, and median incomes of at least 3-4 times the lot rent that mobile home parks are charging.

That being said, the hottest real estate markets in the United States at any given time are of course always subject to change. It is possible that the underlying dynamics that make those markets great can shift. However, the markets that we are watching right now include the following: 

Raleigh, NC

With numerous colleges in the immediate area, Raleigh is one of the most educated cities in America. This also helps to keep the unemployment rate in the city low. This is beneficial in that those who do decide to rent a mobile home park space from you will likely have the employment necessary to pay their rent. 

Additionally, Raleigh has an aging population with estimates showing that the number of people aged 65 or older will jump from one in six in 2020 to one in five by 2028. This is a major change that will undoubtedly have ripple effects throughout the housing market in the city. The older population tends to favor mobile homes for their affordability and this could spur on increased demand for mobile homes in the coming years throughout Raleigh. 

Various economics factors point to a slight decrease in housing prices in the Raleigh, NC area moving forward. If that pans out, then the expectation is that there will be an increase in demand for housing the area. People will see those price declines and come rushing into the area looking for property that they can afford. Get invested in this market now and take advantage of the rush when it comes over the next few years. 

Phoenix, AZ

Looking to escape the bitter cold of winter and live in a city where business is booming? If so, there is no better place to go than Phoenix, Arizona. That’s a big reason why the Phoenix market has enjoyed a 30% appreciation in real estate prices since 2020. 

Another leading factor contributing to the increase in real estate prices in the area is an increase in demand from remote workers. Anyone can work from virtually anywhere with a remote job, and plenty have decided that the right answer for them is to station themselves in Phoenix and enjoy the warm weather and the amenities available in the area even as they work. 

Traditional jobs are also plentiful in Phoenix with major corporations hosting huge hubs in the area. Among the corporate opportunities in Phoenix include the following: 

• Uber’s Center of Excellence – The rideshare company has decided that Phoenix is the ideal place to station one of its corporate hubs. They see the area as welcoming to technology companies and as a place that has plenty of tech-savvy employees to help them power their business forward.
• Amazon’s Logistics Hub – If there is one company that has figured out how to do logistics right, it is Amazon. The world’s largest online retailer is always looking for innovative ways to improve on their deliveries, and they have added approximately 550 tech jobs to the Phoenix area via their logistics hub. 
• Shutterfly’s Manufacturing Facility – Known as an online imaging service, Shutterfly also has manufacturing needs that must be handled as well. The company found what it was looking for in the Phoenix area and decided that it would create a manufacturing facility right there to improve upon its ability to provide service to customers on demand.

These corporate opportunities as well as the remote work opportunities that millions of Americans are already taking advantage of are bolstering the Phoenix economy. 

Mobile home parks are already popular throughout the Southwest, and they are a natural fit for Phoenix, AZ as well. You can provide affordable and flexible housing to a generation that relates to both concepts.

Austin, TX

Finally, we turn our attention to the Lone Star State. The state has been honored to be named for having the top business climate in the country, and you will certainly find the kind of economic activity that makes for a great mobile home park investing environment. 

Austin, Texas has a lot going for it, including: 

• No State Income Tax – Texas is one of the few states in the country that does not charge a state income tax at all. This lets residents keep more of their hard-earned money in their pockets and out of the greedy hands of the government. 
• State Capital and Large Universities – Austin is the capitol of Texas and also boasts of a large and respected university system there. This leads to a highly educated population that tends to maintain steady employment. 
• Diversified Economy – Unlike many other cities, Austin has a diverse economy that is not overly reliant on any one particular sector. This adds to a greater sense of stability as investors look for places where they don’t have to worry quite as much about the boom and bust cycle of one particular sector of the economy. 
• Rapidly Growing Population – All of the factors above have drawn in a lot of people in the past few years, and that growth is not going away anytime soon. As the public continues to hear about the wonders of Austin, Texas, they continue to become even more intrigued. 

They say you don’t mess with Texas, but consider looking around at the investment opportunities there.

Get Invested in Mobile Home Parks Now

The time to jump on the opportunities listed above is now. It is not as though this is private or unknown information. There are plenty of other investors who are eagerly looking to do precisely the same things that you are. Allowing them to beat you to the punch puts you at a disadvantage. These opportunities won’t last forever, and the dynamics of each individual real estate market are always in flux. 

Given the surging need for affordable housing and the potential ROI on mobile home parks right now, don’t let the opportunity slip away. Check out properties in all of the cities mentioned above and work out a strategy to help your mobile park stand out from the rest in order to create an investment that you can be proud of and that should earn you a respectable return.