Why the Number of Mobile Home Parks in the United States is Getting Smaller
Updated: Jul 22, 2020
Welcome back to the Passive Mobile Home Park Investing Podcast.
My name is Andrew Keel I'm a real estate investment specialist, entrepreneur, fitness advocate and family man. Today I’m talking about the second reason why you should invest in mobile home parks. Reason #2 is that the supply of mobile homes parks in the United States is shrinking every year. I’ll go over a couple of the biggest reasons why they’re disappearing, including the fact that they’re a loss leader for municipalities. I will also discuss what this means for investors.
Would you like the pre-investment checklist that I use to review mobile home park deals before I invest in them? We are offering this as a free gift if you go to iTunes and leave a five-star review. To get the pre-investment checklist, leave us a five-star review on iTunes and then send us an email at PassiveMHPinvesting@gmail.com. In the email, please tell us who you are, what screen name you used to leave that review, and we’ll send the pre-investment checklist, directly to your inbox.
00:21 - Hello and Welcome
00:30 - Reason #2: The supply of mobile home parks is shrinking
01:10 - ‘Endangered: San Antonio’s Vanishing Mobile Home Parks and a Path for Preservation’ which was written by UT Austin
02:55 - Mobile home parks are a loss leader for municipalities
04:05 - Supply-and-demand
04:21 - Conclusion and thank you
04:33 - Pre-investment checklist
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Welcome to The Passive Mobile Home Park Investing Podcast with your host Andrew Keel. This is the podcast where you can get the education you need to invest 100% passively in a highly profitable niche of mobile home parks.
Hello and welcome to The Passive Mobile Home Park Investing Podcast. I'm your host, Andrew Keel. Today, we're going to discuss the second reason why you should invest in mobile home parks. Reason number two as to why you should invest in MHPs is because the supply of mobile home park properties in the United States is shrinking every single year. This is the major value proposition for investing in mobile home parks, in my opinion.
Let me explain why. There are roughly 44,000 manufactured housing communities in the United States and mismanaged communities are being redeveloped or shut down at an alarming rate. Check out this snippet from a report titled Endangered: San Antonio’s Vanishing Mobile Home Parks and a Path for Preservation. That was done by UT, Austin. I quote, "Seven out of the nine parks that closed in 2014 were due to substandard conditions. There were serious health and safety violations which led to the city closing them down. The couple other ones were also closed due to redevelopment." This was said by Liz Davila who was the co-author of the report researching San Antonio Mobile Home Parks.
The negative stigma of dirty trailer parks and initiatives like ‘Not in My Backyard’ have also made zoning more restrictive. Green street advisors estimate that only 10 communities have been developed in the past two decades while at least 10 communities every year have been torn down and redeveloped into other land uses.
99% of municipalities will never approve another mobile home park development.
If you owned one of the few or only mobile home parks in town, you're the affordable housing equivalent of a standard oil company in 1910. Yeah, you can possibly have a monopoly on supply. Compare this to apartment buildings and self storage complexes where new developments are being started each and every day, you can see the instant value of this asset class.
Another big point as to why it's hard to get a new mobile home park development approved is because mobile home parks are a lost leader in terms of expenses for municipalities. According to npr.org, it costs on average $10,615 per year to put a child through public schooling. Mobile homes are treated as personal property. Therefore, owners of the individual mobile homes pay personal property taxes like you do on a vehicle or a boat registration at the DMV.
These personal property taxes are very affordable but a family of four, say with two kids in public school, may only pay $100 a year total in these personal property taxes. That's a loss of over $20,000 per year for the municipality. Hence, one reason why it's not physically responsible for the zoning of a new mobile home park property to be approved. Econ 101 taught us about supply and demand. With limited supply and off the charts demand, which we're going to talk about in the next episode, this could equal great opportunity.
Anyway, that's it for this episode on The Passive Mobile Home Park Investing Podcast. Thank you all so much for tuning in.
Would you like the pre-investment checklist that I personally used to review mobile home park deals before I invest in them? We are offering this as a free gift to those of you who go to iTunes and leave our podcast a five-star review. To get the pre-investment checklist, leave us a five-star review on iTunes and then send us an email to email@example.com. In the email, please tell us who you are and what screen name you used to leave that review, and we will send out the pre-investment checklist directly to your inbox. It’s that easy. Once again, that email address is firstname.lastname@example.org. Thanks again for tuning in.