Advantages and Disadvantages of Mobile Home Parks
Mobile home parks are a fascinating sector of commercial real estate. They meet a growing need for affordable housing while offering strong returns for investors. But like all investments, they come with both opportunities and risks.
Why Mobile Home Parks Stand Out
- Demand for lower-cost housing is rising, especially among veterans, millennials, and multi-generational families.
- Vacancies are historically low—once tenants move in, they rarely move out.
- Moving a mobile home is expensive ($3,000–$5,000+), making tenant turnover less likely.
- Infrastructure is relatively simple: pads, utilities, and management.
Advantages for Investors
- Potential for seller financing or master lease options (thanks to many owners holding properties free and clear).
- Steady cash flow and historically low vacancy rates.
- Faster depreciation benefits compared to apartments.
- Potential to acquire abandoned units and rent them for additional income.
Disadvantages to Watch For
- Cash or money order rents sometimes go unreported—making income harder to verify.
- Negative stigma of “trailer parks” can affect perception.
- Shorter economic life compared to stick-built homes.
- Requires careful due diligence and sometimes creative deal structures.
Warren Buffett has invested billions into this space through Clayton Homes and Berkshire Hathaway—manufacturing, financing, insuring, and profiting at every step. If the Oracle of Omaha sees potential here, maybe you should too.
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