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Ways To Profit From A Mobile Home Park

Aug 17, 2007
A mobile home without a doubt is the most efficient and feasible housing ever created. But nowadays mobile homes have become less mobile. These houses are comfortable, large and very luxurious and this is the reason that more than 16 million Americans have chosen to live in mobile homes. Those who invest in the manufactured homes look out for profits and it is not unusual that 25% to 100% profit every year is on record. We enjoy two out of the four sources of profits when we buy and sell mobile homes.

Buy low, sell high: The best way to earn initial net profit is by buying low and selling high and you can do this by buying the mobile home for cash and then selling it on pre-set terms. However, to do this you need an extra amount of cash at hand and an easy way to get money is to take a loan.

Considering the amount of initial net profit you earn on the sale of mobile homes, you can easily pay the moneylenders a high rate of interest, as much as 11-15%. Once you demonstrate your repayment capability to the moneylenders and convince them that the loan is safe, they are certain to bite the bait.

Moneylenders are more worried about their principal amount, rather than the interest rate. You should convince them and put them at ease by giving them a promissory note in which you personally guarantee the payments. You should avoid borrowing extra money, other than the amount required to buy.

Furnish Seller financing: You can earn additional profit by waiting for your money and it is always greater than the profit earned by selling. You can increase and enjoy your monthly income and note the profit each time you calculate on paper. The other two sources of profit earned by Mobile Home Park owners include:

1. By renting the land: Each time you sell a mobile home park, you can also rent the space occupied by the home and by doing so you can increase the parks cash profit and acquire a monthly income from the home and the lot. Since homeowners are usually not permitted to move their homes out of the park until their payment is paid, the rental income obtained from the park becomes more reliable.

2. By raising the rate of the park: Like any other rental property, profits and growth go side by side and by increasing the net income earned by renting the park, you actually increase its market value. For example, if you earn a net income of $100 /month, each time you rent a lot it results to around $1,200 of cash profit each year. By increasing the net income by $1,200 per year, you can increase the property value by $12,000. Like this, each time you sell a lot you can increase your equity in the park by several thousand dollars. Even if you have equity of 20% after you finance 80% for the park, you will still have 100% growth and you dont even have to share the equity with the mortgage holder. Additional way to increase the value of the rental property is by improving its appearance and condition.
About the Author
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