Why You Aren’t Making Six Figures From Your Mobile Home Park
Many people hear about investors who are making $100,000 a year from their mobile home parks. These landlords have a lot of different factors in play for them. First and foremost, they have the right number of lots and those lots are always occupied. Secondly, they structured their original deal right. They also have trailer parks in areas of the country where mobile home parks thrive. Let’s take a look at some of the factors you need to make six figures a year, minimum, off your parking lot.
The right number of lots is key
In the United States, the typical mobile home park lot rental is anywhere from $200 to $400. Let’s say that you own a 30-lot park, you could theoretically net as much as $144,000 per year from lot rent. If you only had a 20-lot park, you’d only net $96,000 per year. A larger number of lots and the ability to charge a higher rent will determine whether or not you could be making six figures on your mobile home park.
You aren’t charging enough for rent
If you are the typical mobile home park owner, you probably have set your lot rent per month at the lower end of the spectrum. Most people who live in a mobile home park aren’t going to have $6,000 to $8,000 to move their home to a cheaper park. Typically speaking, there is a little bit of wiggle room to increase your rent a modest amount each year. Let’s say that you own a 30-lot unit and charge $200 per month. You’re bringing in $72,000 each year on your mobile home park. Over a period of four years, by simply raising your lot rent by $25, you will be clearing six figures on your mobile home park.
Your utilities are not sub-metered
Landlords who cover their utilities for their tenants realize that utilities are probably the biggest cost of owning a mobile home park. Some research indicates that utility usage at sub-metered mobile home parks is 30% less than parks where the owners cover the utility usage. There are also some municipalities that allow for deduct meters. Water that does not end up in the sewer is another way sub-metering can help save money in a mobile home park.
You didn’t structure your deal right
Many trailer park owners find lucrative deals on their properties through seller financing. Seller financing generally allows for a more equitable payment situation, such as a smaller downpayment and a longer term on the deal. Sometimes, banks throw in some stiffer payment terms and require a larger downpayment.
Getting Out Of Your Mobile Home Park
If you aren’t making six figures a year off your trailer park, you probably will find that it is a hassle and maybe even a liability at times. Mobile Home Park Instant Offer can get you a fast cash offer on your mobile home park and let you walk away from your “investment” that is no longer returning you a dividend.