Ok, I’m mostly convinced… I’m not buying the cap rate argument in the article. The same things he says detract from the cap rate on single family homes exist in MHP’s also though not to the same scale (through in a couple of park owned homes and it does)
The section on pushing rents I absolutely buy. By going with section 8 tenants the down side is negligible but it makes it hard to raise rents as well.
There does seem to be a lot more competition to purchase single family homes. In fact if I have a property that goes on the market a little below market offers always take us back to market value. So when looking for an opportunity there seem to be more in the MHP purchase. (I wish there was another boot camp this year as I have a conflict for the one scheduled)
One downside is it doesn’t seem like the equity is as liquid. We will return to a somewhat normal mortgage market in the next few years. When that happens if I have equity in a rental property I can refinance it and cash out. That doesn’t seem as easy to do. So tapping that equity for a down payment on a larger park seems to be unlikely.
Another downside is management. I read a lot about having greeters, and park managers and how they escalate problems to the owner, or owners that are even involved in leasing spaces themselves. With SFR homes I only hear about major problems, otherwise I get a check each month (direct deposited at that).
So are the last two issues misconceptions?