Mobile homes have always been around as an alternate form of housing that was popular in certain states. In fact, some states such as Nebraska suggest a 226% increase in mobile homes since 2009. When coupled with an increase in average U.S. rent over the past couple of years and 40% savings on housing costs with mobile homes, they’re becoming an increasingly viable choice for families across the nation.
In fact, big investors have started to buy up American trailer parks. There are currently around 22 million Americans living in mobile homes and this number is set to increase as manufactured housing becomes an even hotter commodity over the next few years. So are mobile homes a good investment in 2020? We’d say so.
Mobile homes are ultimately more affordable
Mobile homes go for less than $100,000 per unit for modern models. Maintenance costs are also extremely low compared to regular houses and their demand is higher than ever. Since mobile homes are relatively affordable for buyers, it also makes them enticing for investors as well. It can prove to be a creative and relatively inexpensive way to expand your investment portfolio.
Only 20% of mobile home parks are professionally-owned
According to Reonomy, only 20% of mobile home parks in the country are owned by professionals. The remaining 80% is up for grabs for investors that are looking to diversify their investment portfolio or even develop a new niche for themselves. This ultimately means less competition and more opportunities for you to take advantage of.
Mobile home parks have the highest cap rate of any real estate niche
Another statistic by Reonomy shows that mobile home parks currently have the highest capitalization rate of any real estate niche at roughly 7-10% nationally, giving it the most potential in terms of return on your investment.
There’s less competition in the market (for now)
Establishing yourself in the mobile home investment market is a fantastic idea since it’s still a very tame market in comparison to other real estate niches. You could consider it a fairly new form of property investment and you won’t be competing against a large volume of traditional investors that have more capital to work with. As more Americans move into mobile homes, more investors will take notice of this trend and capitalize on it.
If done correctly, mobile home investments can be extremely profitable. With its fairly low barrier of entry, high cap rate and low market competition, it’s a fantastic opportunity for up-and-coming real estate investors to sink their teeth into a promising market. While it doesn’t come without concerns such as the depreciation of units, it’s a creative way to expand your investment portfolio and an opportunity to take advantage of a largely untapped market.
Interested in learning more about home mobile investments? Don’t hesitate to get in touch with us today for more information.