We have recently closed on the sale of a mobile home park investment. The Tradewinds Mobile Home Park in Bountiful, Utah was sold to a local investor. The park was an older park consisting of individual, single-wide mobile homes. The purchase included the park only. No homes were included in the sale.
Several of my clients have been seeking mobile home park investments in the last 12 months. Their theory being that because of most cities reluctance to grant zoning for new mobile homes parks, existing parks are experiencing strong occupancies. Unlike most commercial properties, a few vacancies have very little impact on the overall return. It is also a commercial real estate investment type that tends to do better in recessionary economies. The hope is that strong occupancies due to a lack of new supply will provide greater than average rent growth.
The challenge with mobile home park investment is understanding management. There are more nuances dealing with tenants than in traditional properties. Its is also a property type you might not feel proud telling your friends that you own.
If you can get over these hurdles there are some real financial advantages. In addition to this park I have other clients under contract on other parks that we’ll discuss in the future.