More and more real estate investors are beginning to take advantage of a less visible area of investment – mobile home parks. Investing in mobile home parks offers several advantages for the investor – low overhead, low maintenance, cash flow, and lower annual tax obligations.
While this post addresses this investment opportunity specifically in Texas, there are similar opportunities nationwide. As with any investment opportunity, investors should do their due diligence to ensure their best potential for a return on their investment.
Mobile Home Park Investing in General
Mobile home park investing does not involve owning and maintaining mobile homes themselves. Mobile home park investors own the land where the mobile homes are located. The mobile homes themselves are most often individually owned, and the owners lease or rent a lot within the mobile home park.
This means less overhead for the investor and a higher profit percentage. And park owners only owe taxes on the land itself, not each individual mobile home.
Mobile Home Park Statistics
The Manufactured Housing Institute (MHI) Industry Overview which was updated in May 2021, reported that 22 million people in the US live in mobile homes. Current statistics show site-built homes averaging $119 per square foot, and manufactured homes averaging just over $59.50 per square foot. With the cost per square foot being right at 50% less expensive than that of a site-built home, manufactured homes are a popular option among individuals and families with a much smaller budget for homeownership.
Current numbers from the US Census and the Manufactured Housing Institute (MHI) show more than 43,000 mobile home communities in the US. Every U.S. state, with the exception of Hawaii, has mobile home parks. (Zoning laws make mobile home parks illegal in Hawaii.) This allows mobile homeowners who cannot afford to purchase a separate parcel of land for their home, to choose from a wide variety of locations to rent or lease a parcel within a park for situating their home.
So Why Choose Texas for Investing?
In 2020, over 95,000 new manufactured homes were produced. The Manufactured Housing Institute (MHI) reports that 31% of those new homes were placed in mobile home communities. Of the 43,000 reported mobile home communities across the U.S., more of those mobile home parks – 5,176 of them – are in Texas, more than any other state. And, of the 136 manufactured home production plants in the U.S., the vast majority (24) are also located in Texas. That is more than the next two states combined – Pennsylvania with 11 and Tennessee with 10.
Ways to Invest in Mobile Home Parks
As an investor, there are a couple of options for investing. You can either buy a mobile home park outright or invest with a mobile home park syndicator. As a park owner, you can hire a park manager to handle the day-to-day running of the park. Investing with a syndicator is a much more passive option requiring the financial investment only.
Both options generate cash flow, so your choice really lies with how much money and time you want to invest, and how much control you choose to have over the investment.
Consulting with a professional, like those at American Made Home Solutions, is an important step in learning to navigate this investment opportunity.
American Made Home Solutions
At American Made Home Solutions, our mission is to rejuvenate neighborhoods and increase the standard of living by improving the overall quality of housing for the residents. Our team of experts includes real estate investors who are always open to new investment opportunities – including partnering with mobile home park owners and other investors who want to take advantage of this option.
Purpose-driven investing sets American Made Home Solutions apart. We utilize investing as a vehicle to provide support and security to struggling families in America. We believe in living with an abundance mindset that creates opportunities to serve our neighbors while striving for lucrative investment returns.
We have a strong understanding of what it takes to balance front-end operations with back-end strategic planning. We believe in leading through strength, respect, and a relentless pursuit of excellence. Our diversity and depth of operational management leadership experience within Fortune 500 companies give us a level of professionalism and exceptionalism that is unmatched.
Conclusion
Investing in mobile home parks is an option for real estate investors that is becoming more popular. With more than 22 million Americans living in these communities across 49 states, it is a stable option for investment that also generates a sustained cash flow through any market.
Texas has the most mobile home communities of any state. With the additional benefit of 24 manufactured home manufacturing plants also located in Texas, the investment potential is increased.
Working with the experienced professionals at American Made Home Solutions can help you better understand this investment opportunity. And, should you decide this is an option to pursue, our experts can help you better navigate the process or even partner with you.
Contact us today for a consultation.
