So I am in the position to purchase out right 2-3 mobile homes. I know there are park fees and utilities and taxes so is it worth it to do this? also is a retired community a safer bet for tenants?
Whether it is worth it or not is entirely dependant on your specific business model. Your question is as vague as asking how much does a used car cost.If you use a base number of 50% of rent going to expenses associated with upkeep of the home ( taxes, advertising, vacancies, accounting, legal, evictions etc,) add the cost of your lot rent plus give yourself a return on cash invested to purchase the home what you have left is your profit. If that works out to $100 per home per month then as a rental property that would be a average expected return.The quality of your tenants is based entirely on your screening skills.
If you have the cash to afford 2-3 mobile homes, I’d rather see you buy 1 or 2 mobile homes on land (a mini-mobile home park). You’ll be able to get a mortgage on the land and lever your investment capital to ‘have it all’ - land and home(s). You’ll do much better financially owning the land and RTO-ing the mobile homes. Put the maintenance costs on the resident(s), and keep the land for yourself. You’ll also be helping someone(s) get out of the game of paying rent forever and to becoming a homeowner. It’s a win/win. Being a ‘Lonnie dealer’ is not nearly as profitable as being a mobile home park owner. BTW - the quality of tenants is not only based on your screening skills, but also and to a perhaps greater extent, by the economy and school district in which you purchase your park. We have a property on the outskirts of Oklahoma City in a mediocre school district that will never have tenants as good as another of our properties that is much closer-in to downtown Tulsa and that is walking distance to one of the States’ best high schools. No amount of screening will turn the tenant base of the first property into the tenant base of the second property.Good luck,-Jefferson-
Nvno1, I wholeheartedly agree with Jefferson:’…buy 1 or 2 mobile homes on land (a mini-mobile home park)'One of our relatives buys homes, renovates them and sells them for some extra income.My Husband and I are in the process of presenting the facts to them that they could use the same capital to buy a MHP.The relatives say that they cannot afford a big MHP.I told them to start small. Buy some land with 2 or 3 mobile homes on them.Like Jefferson said you can eventually sell the homes, but continue to receive cash flow from the Land Rent.We wish you the best!