Mobile Home Parks: A Recession-Resistant Investment

It’s a word that most don’t want to think about at all: Recession. However, we all know that this is an economic possibility that could come about at any time. Wise investors will prepare themselves ahead of time by aligning their portfolios in such a way that a recession won’t completely break their financial future. An option with significant appeal for combating the impacts of a recession are mobile home park investments. We will explore both why mobile home parks are such appealing investments in the face of a potential recession and how to get invested in them.

Sky High Demand, But Limited Supply

Housing prices have become unaffordable for many people within the last few decades, and, particularly within the last few years. This has led many to search for alternative living options. Plenty have decided that manufactured or mobile homes are right for them. However, they don’t just need the physical building itself, but also a safe place to put that home. 

With an influx of people choosing to live in mobile or manufactured homes, the parks where they can place their homes are also in demand. Safe and well-managed mobile home parks are what most people are looking for, so you can be highly rewarded for providing this to mobile home owners.

How to Make an Investment in a Mobile Home Park

There are a series of steps that must be taken to get invested in mobile home parks. It is important to follow these tried and true steps to put your money to work. Among the things that should be done include:

Educate Yourself About the Market

Take time to learn about the mobile home park market in your area. You should give yourself some time to gather information about the health of the mobile home park market in your geographic area and also network with other investors. They can provide you with some insights about where you can find the best deals.

Lay Out Your Investment Framework

You should have firm criteria that you consider before making any kind of investment in a mobile home park. It is essential that you know what you are specifically looking for out of your mobile home park investment and that you stick to that criteria precisely. Among the factors worthy of consideration include the following: 

• Geographic Region – You should have a specific geographic region in mind for your investments. For most people, this will be their local market as that is the market that they are already the most familiar with. However, this can differ if you notice that there are other areas where the market is more appealing. 
• Size of the Mobile Home Park – The size of the mobile home park that you wish to invest in is another factor to think about before making an investment. Operating a larger lot increases the potential returns from that investment, and to be honest isn’t much more work than operating a smaller park.
• Return-On-Investment (ROI) Goals – Another critical factor that must be considered are your ROI goals for the investment. After all, you should have specific objectives in mind when you put your money to work. This means examining what you believe a reasonable rate of return is on your money and then finding the properties that you believe will deliver that level of success to you. 

Once you have completed all of this homework, then you are ready to find the property that will work best for you. 

Finding a Property That Works for You

After you have clearly identified the characteristics that make a given mobile home park appealing to you, then it is time to locate where that type of property might be located. The easiest route to get started with this is to look at online property listing platforms such as Loopnet or Mobilehomeparkstore.com. Exploring these platforms will give you a comprehensive overview of available options and help you understand the evolution of mobile home parks in your desired area. As you narrow down your choices, consider factors such as community amenities, lot sizes, and proximity to essential services. This focused approach will ensure you find a property that not only meets your criteria but also aligns with current trends in the market.

Those platforms allow you to cast a wide net and start searching for the right property for you based on the broadest possible criteria. They are a great starting point in that you can quickly narrow down your search and only look at the types of properties that make the most sense to you. However, you might explore some more refined options as well, including: 

• Networking with Local Professionals to Find Deals – It is always smart to keep an open mind to collaborating with your fellow real estate professionals. You may be able to work with them to find some deals that you otherwise would not have known about. They can also direct you towards the types of listings that make the most sense for you based on your specified criteria. Just keep in mind that these relationships are a “give and take” situation and you should be willing to help out others as well. 
• Search for “Off-Market” Deals – Not every mobile home park will be listed on a real estate website. In fact, there are some mobile home park owners who might not currently have their property on the market at all. This doesn’t mean that it is necessarily not for sale. If you approach one of these property owners with an offer that makes sense to them, they might be willing to work with you and sell you their property. 

These are a few places where you might find what you are looking for in the mobile home park real estate market. Always poke around every corner until you find the exact type of property that you are interested in. That is the only way that you will earn the types of returns that you need out of this investment. 

The Recession-Proof Nature of Mobile Home Parks 

We have now discussed how you can get involved with investing in mobile home parks and a few steps to go about doing so. However, a big question remains: “Why should you be interested in mobile home parks as an investment over other options?”. The answer to that question lies in the recession-proof nature of mobile home parks as a whole. 

A few of the attributes that make mobile home parks so much more recession-proof than other investments include the following: 

Owner-Occupied Homes

More than 70% of mobile homes are owner-occupied. This means that you are renting the mobile home park space to people who outright own their homes. This means that they are far more likely to take good care of those homes than people who are simply renters. 

Not only are mobile home owners more likely to take care of the property where they situate their home, but they are also likely to stay put in the same place for a significant amount of time as well. Thus, turnover rates are generally lower, and landlords can count on a steady stream of rent payments coming in each month.

Low Maintenance Cost

Forking over a lot of money to maintain the property that you have invested in eats away at your profitability. It is required by law that landlords property maintain the living spaces that they provide to their tenants. However, with mobile home parks, the cost of maintenance is significantly reduced because typically residents own their own homes and are directly responsible for maintaining them. As such, the investor is typically only responsible for maintaining the parks infrastructure and common areas.

Housing Demand That is Inelastic

The economic conditions might get bad, but people will still need a place to live. Therefore, their demand for housing remains inelastic. This is to say that they will still require a place to live no matter what. Therefore, housing demand remains high even when there is a recession in full swing. 

Mobile home parks can become even more appealing to the public during times of recession because of their relatively low cost compared to other forms of housing. Investors can capitalize on this by providing the reliable and affordable housing that the public is interested in.

Invest Now Ahead of a Potential Recession

No one knows with absolute certainty when a recession will hit, how long it will last, or how deep it will be. However, it is possible to start investing now to prepare yourself for the possibility that a recession could take hold. If you create a plan now, then you can get ahead of the rush of other investors who might also see this opportunity and take advantage of it. 

Do your best now to insulate your portfolio against the potential risk of a recession and put your money to work in mobile home parks that yield results for you today. I have recently created the The Ultimate Mobile Home Park Investing Course, which covers everything you need today in order to purchase your first or next mobile home park.