Mobile home parks provide an excellent opportunity to create consistent cash flow and a business that is recession-proof. You’ll notice that I used the word business and not “investment”. Parks are more like a business and less like an investment because you actively manage the mobile home parks and if you want to extract the most cash flow than you’ll have to be actively involved.
Now some people will argue with the statement above but keep in mind the best mobile home parks to buy are ones that are mismanaged by lazy owners which means they don’t actively work in the business.
Is owning a mobile home park a good investment?
In my opinion, the answer is yes but it’s not for everyone.
First thing you should do is determine if you want to be actively involved in this industry or do you want to be more passive.
If you choose to be active then you’ll find great returns on your money but you’ll need some patience when it comes to acquiring your first park. I’d recommend that you take a class on mobile home park investing and then branch out from there.
If you’re more of a passive investor then I’d look to partner with an active investor and provide debt or take an equity position in an opportunity. There are pros and cons to debt and equity and you’ll have to do your own research to determine which one works best for you.
If you’re unable to find a trustworthy partner then you can look at REITs.
How much do trailer park owners make?
The answer to this question is pretty hard to answer because it depends on quite a few variables. You’ll need to know how big the park is, how much lot rent is charged, operating expenses and so on. In my opinion, you can earn above-average returns in the mobile home industry but it’s not passive income. You’ll need to be active in your investments if you want to extract the most out of them.
How many mobile homes can you put on an acre?
It depends on the zoning rules in the county or city that you’re investing in. The best way to determine how many manufactured homes you can put on a parcel of land is to meet with the local land management office. They’re very easy to work with and they’ll do their best to answer all of your questions.
Mobile home park management
Hiring the right management company for your park can be difficult because you lack the knowledge of how to interview them correctly. Asking the right questions and listening to their answers will help you navigate this important part of the business.
What will or does the property management company do for its management fees?
Strategy – What value are they bringing to the table and can they articulate it in a simplistic way? If management talks about NDAs and proprietary tactics than walk away.
Operations – Do they have a dedicated regional manager, administrative staff, bookkeeping, and HR specialist to closely oversee and monitor your property?
Marketing – What types of marketing do they do? You need specific activities, not general speak. If they can’t speak to online marketing initiatives then I’d look elsewhere.
Technology – What type of software do they use to manage the park and do you have access via a client portal?
Communication – Will they provide an account manager and monthly KPIs?
Collect rent – The mobile home park manager should have the skills and temperament required for collecting rent. From the start, they’ll need a robust process that you want them to follow. Don’t depend on them to create and implement a process on the fly, it won’t work.
You should consider electronic rent payments and a client portal for tenants to utilize. This makes collecting rent much easier and you’ll wind up collecting more rent by making it easier for the tenant to pay and you remove excuses that they can use to not pay or pay late.
Conflict management – It’s very common for a manager to have to act as a mediator between park tenants and sometimes between their own management staff. You need to remember that a park manager’s job is a thankless job. A lot of responsibility falls on the manager’s shoulders in day-to-day decision making. While everyone expects the manager to have answers, no one really cares about their experience or particular skill set. A tenant who got bit by their neighbor’s dog or has noise complaints will be banking on the manager’s authority to remedy the issue.
Schedule maintenance – Since most mobile homes belong to the park residents and not the park, the manager probably won’t have to deal with home repairs. However, they’re still held responsible for issues involving utilities like water, sewer, power, lawn care, etc.
Not all issues will require a professional, and park managers will end up saving a lot of money for the owner if they can make a quick fix themselves.
Leasing & Sales – Park managers may need to find new residents in addition to managing the current tenants. This can be a lengthy and complicated process because most managers don’t know how to market via online methods. I’d recommend that you work with a digital marketing agency to build a sales funnel for your manager.
This will allow them to be great at operating the park while the online marketing plan does all of the heavy lifting when it comes to driving homeowners to the park. You’ll also need to ensure that you have the appropriate licensing from the state in which you operate.
Make life easy with mobile home park management software
Quickbooks – First on the list is Quickbooks. It is one of the most popular software setups for managing finances, including employee payroll. Notably, Quickbooks will help you manage the finance side of your mobile home park business and make it easy to share information with your accountant.
Rent Manager – Rent Manager features all sorts of tools to help you run your mobile home park in one software. It’s customizable and it adapts to businesses of any size.
Among its various features, you’ll find that it works for accounting and electronic payments. Additionally, mobile and online editions of the software are available for users.
Property Tracker – If this is your first mobile home park purchase then you might have an interest in Property Tracker’s evaluation tool but keep in mind there’s nothing better than doing your own due diligence.
Besides evaluating a park, Property Tracker will help you keep an eye on your current portfolio. It leverages built-in analytics to assist you in identifying ways to increase profits, lower taxes, and manage maintenance costs.
Cozy.Co – Very easy and straightforward user experience. Tenants will love it because they can set up recurring rent payments or one-time payments. Plus, Cozy will stay in communication with your tenants on your behalf.
Once you get comfortable with the software you’ll notice that it cuts your workload in half by helping you with tenant screening, listing the mobile home, managing tenant applications, managing tenant requests and communication.
The mobile home park business offers great opportunities
In closing, we hope we’ve helped you identify some mobile home park software that can change your business for the better. Most of the software we’ve listed here will offer you a free demo or trial on their website. Check it out, try each one, and see which benefits you the most.
If you understand how to manage a mobile home park yourself, you’ll have greater success finding the right candidate. Ultimately you’re looking for the person who can help your park thrive. As the park owner, you still have responsibilities but a good park manager can help shoulder the load.
If you’re thinking about selling your RV and mobile home park then contact us today for a free cash offer.