People may be interested in buying commercial buildings, and multi-family homes have real estate investments. However, mobile home parks are another place that investors are interested in right now.
Some of the biggest Klamath Falls RV real estate companies and investors in the US are putting a lot of money on manufactured homes.
Here are 5 reasons why investing in mobile home parks is growing in popularity.
Reasons to Invest in Mobile Home Parks
1. Lesser Maintenance Cost:
The owner of the mobile home park in Klamath Falls, Oregon, is only in charge of fixing things that break and keeping the park in good shape. This could include the cost of landscaping, shoveling snow, and keeping the community pool clean. Repair costs don’t include in the owner’s pocket. So, there are no wiring problems or plumbing problems to fix. Moreover, these costs are up to the person who owns the mobile home. Mostly, land maintenance is done once a year or twice a year. So, investing in a mobile home park is a lot less trouble than investing in a rental property.
2. Low Turnover:
Most of the time, it costs between $5,000 and $10,000 for a mobile-home owner to move their home to a different neighborhood. The high number of moving people keeps people in Klamath Falls RV parks for a long time. In addition, this is not the case in rental homes. When moving to a new neighborhood, tenants don’t have to move the whole unit. They can pack up and leave; therefore, as an investor, you might have to deal with a lot of empty units.
3. Tax Benefits:
Tax breaks on depreciation will be given to you. You can calculate how much a multifamily building has lost in value by using a 27.5-year schedule. The same rule applies to business buildings: 39 years. But every 15 years, most things in RV mobile home parks lose their value. This is because there are a lot of roads and power lines in mobile home parks. When depreciation is sped up, the owners of mobile home parks in Klamath Falls, Oregon, get more tax breaks, which makes their cash flow even better.
4. Low Risk:
Low risk comes from high demand and a low turnover rate. The less you lose out on potential income, the more mobile homes you have in your park. And because tenants are less likely to leave, your investment is less likely to go bad. One of the ideal ways to make money in the US is through mobile home parks. Mobile home parks in the US have an average cap rate of 7–10%, which is at least 2 % higher than apartment buildings, which have an average cap rate of 5.6%. The high rate of capitalization means that the cash flows are good.
5. High Demand:
Since a few years ago, the cost of housing in the US has been going up faster than people’s wages. In the US, almost 33% of households spend more than 30% of their yearly income on housing. People who make less than $25,000 a year have it even worse. This has caused a big increase in the number of people looking for cheap housing, and Klamath Falls RV mobile home parks are one way to meet this need. Also, the quality of mobile homes has never been better than it is now. Today, manufactured housing is the same as on-site housing, which brings a lot of young professionals to low-income housing and community living.
Those who are ready to take risks can make money by renting out Klamath Falls RV mobile homes. Before you invest in a mobile home parks company, you should spend some time learning about it, working with your accountant, and talking to other investors. If you want to buy real estate RV parks, you might want to start with mobile homes.