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Mobile Home Park Investing: The Economies Of Scale - PowerPoint PPT Presentation

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One of the big perks of mobile home park investing is the economy of scale. So how does this show up, what tangible advantages does this offer investors in this sector?

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Mobile Home Park Investing:

The Economies Of Scale


One of the big perks of mobile home park investing

are economies of scale. So how does this show up,

and what tangible advantages do these offer

investors in this sector?

Economies of Scale

Sophisticated investors and heavy-weight funds have long

been known for investing in larger properties with multiple

tenants. Whether these are office buildings, multifamily

apartment buildings, or mobile home parks, these investors

understand, and seek out economies of scale. Properties with

multiple units offer this advantage. This is in stark contrast to

buying one single family home.

Vacancy & Cash Flow

A single family residence can be a good investment.

However, trying to manage a portfolio of single family

rental homes can be a completely different story. What

happens when you have a single unit income property

that goes vacant? It starts costing you money every


Contrast this with holding a mobile home park with 10 or

more lots and tenants. Even if 30% of those tenants leave or

stop performing investors ought to still be generating a

positive monthly income. The chances of 10 units in a

mobile home park all going empty at the same time is far

lower than a single family home going vacant at any time.

This not only ensures positive returns, but consistency in

cash flow month after month.

ROI on Property Improvements

The return on improvements for multitenant properties is far

greater. An improvement to community property can raise

the value and rent on all units. For example; putting in a

swimming pool can raise the value of 25 or more units in a

mobile home park. Contrast that with spending almost as

much to put in a pool for a single family home, or having to

fork out for 25 pools for a whole portfolio of single family


Efficiency in Property Management

The most obvious and significant benefit of scale that mobile home parks

offer is when it comes to property management. Having multiple units

on the same lot means dramatically slicing down the time and costs of

property management. This applies to the number of team members and

vendors you need to recruit and manage, and their workloads. This also

rolls over to researching acquisitions, marketing for tenants, and

screening tenants. With a mobile home park just one $15 sign can be

used to market for multiple tenants repeatedly whenever there is an

upcoming vacancy. To compare; multiply the marketing and due

diligence costs by each single family home that you own.


There are great advantages in economies of scale when it

comes to financing too. Having 10 or more units on one

property means fewer loans. Needing just 1 loan versus 10 can

definitely reduce acquisition and operating costs. That

increases your income and bottom line. Just as importantly is

reduction in workload and risk. Managing ten sets of loan

documents, property taxes, invoices, and insurances for just

10 units is much time intensive than one.

Acquisition and Resale Efficiency & Costs

Being able to acquire 10, 20, or 100 units at a time dramatically increases

efficiency when it comes to sourcing and acquiring investment properties.

That also applies on the flip side when liquidating assets and

restructuring portfolios. Do not underestimate the importance of this. In a

recent radio address, speaking on his new book ‘Money’, Tony Robbins

highlights the fact that fees make a massive difference in profits and

wealth building. Even a 1% difference in costs can add up to being

hundreds of thousands of dollars over the years. Seize the benefits of the

economy of scale, and put them to work for you.