Mobile Home Park

A mobile home park is a parcel of land with a unique purpose, and that is to rent out individual lots to owners of mobile homes, modular homes …

A mobile home park is a parcel of land with a unique purpose, and that is to rent out individual lots to owners of mobile homes, modular homes or trailers. The park provides the home owners with the basic utilities, which are connected to their respective mobile homes.

One significant advantage to owning a mobile home park is that, over the past decade or so, demand for mobile parks has increased significantly, while supply has actually decreased. The reason for this shortfall is that most major cities are withholding approval for new parks, preferring instead to use some of the existing parks for new development and as a result existing parks are gaining value over time.

Another advantage is that there is generally low turnover of tenants, because tenants must break down their mobile home to vacate their lot, then moving and arranging for reinstallation of the utilities at another park. The cost of moving from one trailer park to another can be as much as $4,000 for a doublewide trailer. Because of the high moving costs, a majority of tenants have no choice but to accept rent increases. Often the mobile park owner is offered the mobile home for sale if the tenants wish to vacate the park and no longer want the mobile home. The mobile park owner can also benefit by buying mobile homes from vacating tenants, and offer the homes for sale along with the lot rental, at a profit.

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Furthermore, there are typically no permanent structures required by the mobile park owners, with the exception perhaps of laundry room or clubhouses, though many parks provide no such amenities. Operating expenses in mobile home parks are generally less than 40% of gross income, since the park owner’s maintenance extends only to common properties, and up until the point of the utilities connection to the individual homes.

An additional financial benefit to mobile home park owners is accelerated depreciation, over 15 years, of the land improvements, usually for roads, water and sewerage lines, electrical poles, etc.

Sources:
http://wordnet.princeton.edu/perl/webwn?s=trailer%20park
http://www.jmfinvestments.org/cms/content/view/58/38/
http://reviews.ebay.com/Mobile-Home-Parks-vs-Single-Family-Homes-amp-Apartments_W0QQugidZ10000000003860370?ssPageName=BUYGD:CAT:-1:LISTINGS:2
http://www.reiclub.com/articles/profit-mobile-home-park

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