Mobile Home Parks 101.ORG
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Learn more about Mobile Home Parks for sale.
Renters VS Owner Occupied sites when it comes to mobile home parks for sale. Lets start with real facts based on true blue historical figures and sales. Mobile home parks for sale will find more success when the park is full of occupants who rent pads and not homes. There is a demand for owner occupied lots more so than there is a demand for rental parks. This is due primarily to the fact that rental parks are very management intensive. They require serious on-site management and the owners of these parks, if not on-site themselves, risk losing money to unnecessary repairs and maintenance. Rental parks are more difficult to perform a thorough due diligence. Owner Occupied parks are much easier as there is no guess work in terms of how much repair and maintenance will I incur after being the owner of this rental park for sale. Lets look at it from the banks perspective. The banks are afraid of these deals. Their experience is that expenses are through the roof, the client base is peripatetic and thus your money is thereby rendered transient and unstable. This is not to say there is no money in rental parks, there indeed is lots of it. The problem is, there is more expenses to go along with more income.
Consider this fact. Rental parks after all is said and done will typically run 60% to 70% expense factor if operated properly. Lets be conservative and say you could run a rental park on a 55% expense factor. You can run a Mobile home park on a 42% - 48% expense factor if it is primarily owner occupied. The reason you can run an owner occupied park for less is because you as the owner are not responsible for the roof, and the hot water tank and so on. Furthermore since you are not responsible for all these items, you are also relieved of having to have staff or contractors on call at all hours of the day when these roofs, and hot water tanks and furnaces go bad etc.
When looking at Mobile Home Parks for sale which are primarily rentals where the tenant rents the pad and the home, the buyer should realize what they are buying. They are buying an apartment complex that is split off into units which deteriorate at a much faster rate than a freestanding brick building would. Buyer beware. Also, once you go the rental route you are not going to re-create the wheel by turning the rental park into an owner occupied park. This is an up hill battle and an unrealistic approach.
Bottom line here, when looking for mobile home parks for sale you should stick with the owner occupied parks especially if you are a first time buyer or a passive investor. Keep it simple. There are specific buyers with specific needs with respect to depreciation goals and so on in which rental parks may benefit them more so than a typical buyer. It is a rare buyer who seeks these types of communities. Common sense always tells us to stick to the items that are in high demand, low in risk, and easy to finance. That's the bottom line.
We hope you have a better understanding when it comes to mobile home parks for sale and considering Owner Occupied Mobile Home Communities VS Rental Parks.
Should you have any questions about this site or any site within the Gorial Realty Family of web sites feel free to call upon us for answers.
-Samer N. Gorial, and John P. Gorial of Gorial Realty LLC (866) 66 PARKS