Mobile Home Parks

Mobile home parks are places where manufactured homes are set up like a community.

Mobile home parks are an affordable alternative to regular low income housing and apartments.  Mobile home parks are often an affordable housing option for individuals and families. 

Mobile home parks are not required to follow the same design standards as every other development within a community.

Mobile home parks are a land play with a large monthly cash flow. Mobile home parks are almost solely priced by assigning a value to current cash flows. 

Mobile home parks are given from one to five stars based on criteria such as location, percent of double-wide versus single-wide units, and the presence of paved streets, curbs and gutters, skirting around the units, and amenities.  Mobile home parks are great long-term investments. 

No one seems to have good numbers, but "wherever population is booming and land values are rising, older mobile home parks are becoming anachronisms," says John McIlwain, senior fellow for housing at the Urban Land Institute. But despite their ubiquity, mobile home parks are perhaps the most contentious housing phenomenon in America.  “Communities are concerned because they’re afraid that mobile home parks aren’t going to pay their share of the costs, that the taxes on the park and the homes aren’t going to be enough to offset the costs for police, fire, and schools,” McIlwain said. 

According to Jan Breidenbach, of the Southern California Association of Non-Profit Housing, mobile home parks are, at times, "nothing more than moveable slums.

Mobile homes have been widely accepted in other parts of the country, but many localities in New York have passed zoning requirements so restrictive that mobile home parks are virtually impossible to build.

Mobile home parks are not places where people build wealth through homeownership.

Public water systems that serve mobile home parks are regulated by the Water Supply Division and are defined as any water system that connects to fifteen or more houses or serves more than 25 people.

But mobile home parks aren't in danger of becoming extinct everywhere — just in areas where land values are soaring.  No new mobile home parks are being built and existing ones charge rentals beyond the means of the elderly residents.

This is because mobile home parks are not popular investments.  In many cases mobile home parks are closed due to water or septic problems that the owner is not able or willing to fix.

Unlike most land investments that are considered sunken costs until someone sells or builds, mobile home parks are producing large monthly cash flows as you rent the dirt the mobile homes sit on.  Similar to multi-family with strong cash flow, mobile home parks are underwritten much like multifamily with roughly similar loan-to-value and debt service requirements.  For instance, mobile home parks are multi-tenant properties similar to apartments, and many lenders view them favorably in terms of reducing economic vacancy and risk.  Yet it is important for commercial real estate pros to realize that mobile home parks are not synonymous with multifamily properties in lenders' eyes.

Common in rural areas, more mobile home parks are being built just outside city limits and are considered suburban.

People who live in mobile home parks are in an unusual situation.  Non-refundable entrance fees for mobile home parks are considered moving costs.  As land becomes increasingly more valuable, mobile home parks are being sold with serious and often devastating results to the residents of these parks.