Investing in Mobile Home Parks

7 Key Factors to Look for When Investing in Mobile Home Parks

Mobile home parks are one of our favorite real estate asset types and we are not alone. Over the past decade, institutional and private investors alike have taken notice of the steady cash flow, recession resilience, and strong demand for affordable housing that this asset class offers. However, like any investment, not all mobile home parks are created equal and we would like to walk you through some of the key factors to look for when evaluating a mobile home park investment.

1. Location and Demand Drivers

Just like any other type of real estate, location matters. We target markets with growing populations, diverse employment bases, and strong demand for affordable housing. Moreover, job growth, good schools, low crime rates and access to major highways or employment centers are also important considerations in our market analysis.

Avoid assuming that mobile home parks in rural areas mean that they are more affordable thus making them a good deal. While parks in rural areas tend to have higher cap rate (lower price to net operating income), too remote a location can lead to limited tenant pool. We recommend parks that are within average commute distance from major employer(s) when considering smaller markets.

2. Tenant Ownership Structure

One of the biggest differentiators in mobile home park investing is whether the tenants own their homes or rent them from the park owner. Parks where residents own their homes and simply pay lot rent tend to take better care of the homes due to the pride of ownership. They also tend to stay longer because it’s expensive and logistically challenging for them to move their homes. In general, tenant owned homes lead to lower maintenance and repair cost and reduced vacancy risk.

By contrast, park-owned homes require more active management: repairs, maintenance, and potential turnover between tenants. They can generate higher gross revenue but often come with much higher operating costs. It’s not always possible to find parks with only tenant owned homes, so one very effective strategy we have used is to offer residents rent-to-own program to transfer ownership to the tenant.

3. Infrastructure and Utility Systems

A park’s infrastructure can make or break the deal. Older parks may have aging utility lines, private septic systems, or outdated electrical setups that can become major capital expenditures down the road.

You’ll want to confirm:

· Water and sewer: Public utilities are more reliable and reduce maintenance headaches.

· Roads and drainage: Check for erosion or flooding issues.

· Electrical: Ensure sufficient capacity for newer, larger manufactured homes.

Public utilities are generally preferable because they reduce maintenance and regulatory risks. If the park relies on private wells or septic systems, make sure they meet current environmental standards and budget for future replacements or upgrades.

4. Occupancy and Rent Collections

Healthy occupancy is a strong indicator of both demand and management quality. A stabilized park will typically be north of 90% occupancy. If a park is significantly below that, you’ll need to understand why: is it poor management, rents are too high, or limited demand in the area?

Review rent rolls carefully. Check for consistent rent collections, rents aligned with market rate, and whether there’s potential for future rent increases. Many parks are “mom and pop” owned and rents are underpriced compared to market rates, offering rent growth potential.

5. Market Rent Potential

One of the biggest value-add opportunity is rent growth. This requires a good understanding of the market rent and current average rent of the park. A park with below-market rents offers a higher potential than one already priced at market rate. The rent increase not only improve monthly cashflow, but it also increases the overall value of the park. For an example, an increase of $50/month/door at a park with 100 doors would increase a park’s monthly cashflow by $5,000 and park’s value by $750,000 at 8% Cap.

6. Infill Manufacturing Homes

Fun fact - the U.S. Department of Housing and Urban Development established the federal Manufactured Home Construction and Safety Standards (HUD Code) in 1976. Since then, homes are built in compliance with HUD Code standards, ensuring better quality, safety, and insulation. They’re still factory-built and transportable but are designed for permanence or semi-permanence on a lot.

Infill refers to the process of bringing in new or used manufactured homes to fill vacant lots within an existing park. Instead of developing new land, the park owner maximizes income by filling the empty pads already available.

7. Regulations and Zoning

Many cities and counties have made it nearly impossible to build new mobile home parks. This is partly because mobile home parks generate less tax revenue than other property types, and nearby homeowners often oppose them due to the stigma around affordable housing. The limited supply of new parks means existing ones are more likely to see strong appreciation over time, especially in growth markets.

Final Thoughts

Mobile home parks are often called the “last frontier” of affordable housing—and for good reason. When properly selected and managed, they offer durable income, low turnover, and strong long-term returns. Focus on markets with population growth, tenant-owned homes, solid infrastructure, and room for operational improvement—and you’ll position yourself for a dependable and rewarding investment.