Why Now Is the Right Time to Invest in Trailer Parks

There is a nationwide housing shortage according to the National Association of Realtors. That shortage is so profound that you can track which parts of the country are most impacted via their housing shortage tracker tool. Play around with that tool for even a few moments and a realization about how much pent-up demand there is for housing and how the supply is not rising to meet the moment will wash over you. 

However, before you allow yourself to collapse into despair about the difference between the desire of the public to own a home and the availability of those properties, you should consider the investment angle. Perhaps there is a way to do your own small part to provide more housing opportunities for people while also making a healthy return on investment (ROI) for yourself. 

One way that you can juggle both of these objectives in today’s market is to invest in trailer parks. They are one of the hottest things going in the real estate investment world, and we want to show you a few of the reasons why you should jump into this market as well. 

A Recession-Resistant Investment

Here is an eye-popping fact that you probably haven’t heard before. According to Green Street Advisors, the operating income for mobile home investments increased by 87% between 2004 and 2018. That was a particularly challenging time for many other types of investments as the Great Recession took hold and ravaged the housing market. However, mobile home investments just keep pushing forward stronger than ever. 

This is a testament to the fact that trailer parks remain a recession-resistant investment that hold up in good times and bad. The public loves a budget-friendly living option, and that is precisely what mobile homes are for them.

The average rent for a one-bedroom apartment rose to $1,600 per month according to Apartment Guide. That represents a significant chunk of the monthly income that an average American family brings in. By contrast, that same dataset showed that the average lot rental per month for a trailer home stood at just $300 per month. That is a far more manageable monthly expense for the average person, and it is a big reason why many have made the decision to give trailer homes a try. As an investment, it will hold strong for you regardless of which way the economic winds are blowing. 

Residents Who Stay for the Long Term

One of the most frustrating things that landlords have to deal with is turnover in their units. People will inevitably move from time to time, but getting the unit ready for the next resident as well as signing all of the necessary documents to move in a new resident is a costly hassle. This is yet another reason to consider the virtues of mobile home investments, the residents tend to stay far longer. 

There are a variety of factors that contribute to the longevity of mobile home residents. Among those factors include: 

• Affordable Living – As we have already mentioned, the affordability of mobile home living is a major selling point for most residents. Once residents get accustomed to paying the lower cost of living in a mobile home, they are not often overly eager to jump back into more expensive options. Therefore, they tend to stay where they are. 
• A Higher Proportion of Retired Residents – Once one enters retirement age, it can be physically challenging to continue to bring in an income. Many are unable to continue working, and they have to tighten their belts as far as their budgets are concerned. Mobile homes become an appealing option to them. This leads to higher proportions of residents in trailer homes being retired than in other living facilities. They are also less apt to move frequently than their younger counterparts. 
• A Strong Sense of Community – Another thing that people don’t always realize when it comes to mobile homes is the fact that residents often develop a strong sense of community with the people that they live near. Those ties keep them rooted in place and make them a reliable source of monthly rent income. 

These are just a handful of the reasons why mobile home residents often stay in place far longer than those who live in apartments or single-family homes. The reliable nature of the income generated by these residents is something that continues to make trailer parks an attractive investment. 

Trailer Parks Offer Multiple Revenue Streams

Owning a trailer park lot provides investors with multiple opportunities to cash in on their investment. Not only can they charge monthly rent for the lot, but many savvy investors have noted additional opportunities for additional revenue beyond rent collection. Forbes offers a glimpse at some potential additional revenue streams that one can capitalize on by owning a trailer park lot space, including: 

• On-Site Laundry – The cost of ownership of a washer and dryer is more than many trailer park residents want to deal with. Instead, you can offer this service to them for a fee via an on-site laundry facility. This allows residents to take care of their laundry needs without the massive upfront investment required to own a washer and dryer. Many residents greatly appreciate this as it enables them to avoid a heavy initial investment in that equipment. 
• Vending Machines – Who among us doesn’t like to grab a quick drink or snack while we are on the go? We know that it is not the most economically efficient way to get our nutrients, but sometimes you just feel like having a little treat. For a few dollars, one can have an ice-cold drink and snack while taking care of other tasks in their day. Your trailer park residents will also appreciate having vending machines available to them, and you can earn some revenue from providing those machines and keeping them stocked. 
• Storage Units – Sometimes people own more possessions than they can reasonably fit into their mobile home. Those possessions might be quite valuable to them either from a monetary point of view or simply because of the sentimental value that they hold. Either way, those residents will want to hold on to their possessions, and this means they might seek out storage units that they can rely upon to keep their items safe. Once again, you can offer those units on your trailer park lot and charge a monthly fee to keep their items locked away for them. 

There are plenty of creative ways that you can create additional revenue streams from your trailer park lot. Don’t hesitate to keep the cash flowing from your investment so that you can see it pay off even faster for you. 

Easily Managed Property 

Out of all of the different types of real estate that you might decide to invest in, trailer park lots are among the most easily managed. You simply purchase the land and rent out those spaces to people who want to plant their mobile homes there. 

Given the fact that those who live in mobile homes tend to stay put longer than other people, they often take great pride in keeping their space reasonably maintained. They won’t necessarily have a huge number of maintenance needs, and you can avoid some of the heftier maintenance expenses that are common with other types of real estate. 

Ideally, you should hire a property manager to help keep your trailer park lot as profitable as possible. In fact, RentPost.com explains some of the top reasons to bring a property manager onboard, including: 

• Improved Work/Life Balance for the Owner (You) – One of the top reasons to hire a property manager for your trailer park lots is simply to give yourself some time back in your day. You deserve a healthy work/life balance just as much as anyone, and you can regain some of that by hiring an effective property manager. He or she will help you deliver the results that you expect from your trailer park lot without overextending yourself. 
• Rent Collection Without the Worries – Charging rent to your tenants is one thing, but making sure that rent is collected in a timely manner every time is something else. You need a property manager who can guarantee that you will receive the rent that you are charging every time without fail. Consistent rent collection like this is one of the foundational cornerstones of a successful property business. 

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• Better Tenant Relations – It is a lot easier to maintain a healthy business relationship with your tenants when you have someone on the ground with them day in and day out. Tenants can bring any concerns that they might have to your property manager so that he or she can address those issues immediately. Tenants will feel like they are being heard more directly and that whatever it is that they need addressed is being handled properly. 
• Regulatory Compliance – Yet another virtue that a property manager for your trailer lot business can bring is the ability to keep you with regulatory compliance with any regulations that you must adhere to as the owner. These regulations can change frequently and are not always easy to keep up with. However, when you bring a property manager onboard, you can instruct that person to stay on top of those rules and regulations for you so you won’t have to worry about it yourself. 

These are just some of the reasons why you should bring on a property manager for your trailer lot business. They will cost you some money out of pocket in the form of a salary, benefits, and other expenses, but they are well worth what they cost when you consider how much value a property manager can add to your life. 

Opportunities for Explosive Growth

There are few investments that are as reliable as real estate. Generally speaking, the tenants who decide to rent a space will continue to make those rent payments above almost anything else. They need a place to live, and taking care of this basic necessity is high up on the list of priorities for most people. As we have alluded to before, those who rent trailer park spaces are even more consistent with their rent payments than some others. Therefore, you can reasonably assume that a trailer park investment should perform quite well for you. 

The most savvy trailer park investors understand that they can use the revenue that they generate from their first investment and roll it into even more purchases. They can rinse and repeat these steps time and time again to generate the kind of explosive growth that most could only dream of from their investments. 

The main difference between someone who experiences explosive growth from their trailer park investment and someone who doesn’t comes down to how well the park is managed. If you follow the guidance and hire a qualified property manager, then you should see tremendous returns on your trailer park investment. 

It is important to note that as you continue to scale up and grow your trailer park empire that you still maintain clear lines of communication with your tenants. You don’t want them to ever feel like you have become too busy to care about their concerns or that you aren’t serious about the business itself. Always keep things manageable for yourself so that you don’t lose the attributes that allowed you to build up the business in the first place. 

While there are certainly many investments that will prove quite volatile in today’s volatile market, investing in a trailer park is not one of them. You can reasonably expect that you will do quite well with a well-managed trailer park investment. Consider adding this to your portfolio to provide the stability and growth opportunities that you are looking for in the coming year. Always be on the hunt for more opportunities to better the returns in your portfolio and to better yourself as a property manager. You will be surprised by how effective this can be.