The prospect of the real estate market is booming with investors eyeing opportunities on every level. One of the sub-categories of the real estate sector remains mobile home parks. While this sector is not as high profile or lucrative as commercial high rise market, but it remains a profitable outlet for mid-tier investors looking to gauge decent profit margins with their money.
The niche of mobile home park investing is fairly modern. It is like owning a land comprising of amenities including parks, streets, roads, etc. A homeowner occupies a mobile home park on a rental basis and in order to attain the right to make use of the land and other facilities surrounding their actual home.
Andrew Lanoie, a popular name in the private investment market has encouraged many investors to tap the potential lying at the disposal of mobile home park investing. The Founder and CEO of Four Peaks Capital Partners are leading a name known for scooping out investment opportunities in the private investing market like the real estate sector. Andrew cites the prospect of mobile home parks investing in promising words. He shares some handy tips for investors looking to make it in the niche, which is as follows:
- It’s always a good idea to be sure of the mobile home park – Before throwing your hat in, it’s always advisable to get your facts right about the entire place. Examine the park’s infrastructure, location, and potentials of expansion, the administrative laws, and income history.
- Areas, where housing is a cheap need to be avoided – Areas having no strong income potential, are going to damage your cash flow because the residential class would most likely be the one that settles for low rates.
- Gather as much knowledge as you can – Get in touch with homeowners, the local police, store managers around and basically, a handful people in the neighborhood. Gather knowledge about the park from them. They can give you details on the park’s history, residents, infrastructure etc.
- Stay wary of infrastructure updates – Carry on maintenance right off the bat. Never cause delays because they could lead to bigger problems costing you more. Electrical, sewage, water, gas, anything there is, attend to it.
- Evaluate the condition – Sometimes it might be cost-effective to rather replace a park than repairing one. Inspect the parks professionally and make a sound decision.
- Try to accommodate the water costs in your rent – Utilities would be a painful cost sometimes and it is better to figure out how you attach this cost to your rent without increasing it too much. Talk to your tenants, work it out.
- Do not have many doubts – Let the naysayers speak. The mobile home park sector has proven to be promising in many respects. Do not let anything discourage you. Scan the profiles of your residents before you let them rent out your property. Build trust with them first and do not make a decision in haste.
More and more investors are shifting towards this particular market which signifies the heap of potential it carries in today’s era of private investing.