After 20+ years in this business I've seen a lot of changes, from wanting to have park owned homes to them being the curse of the business.
But for the guy that's looking for a big return on a small investment, it's the king.
A few months ago while talking to a few clients about their self-managed IRA's, I saw they had a different target than I had really looked at before.
When it came down to the simple bottom line, they wanted to get more money into their funds.
I sat back and ran a bunch of numbers on this and found, the under the right circumstances, owning mobile homes as rentals was a much better return than owning a small park. I already knew it was a great deal just didn't see it as clearly before.
I know, I hear the snarls....but lets look at it.
Right now we have a 2009 3 bedroom 2 bath home that will rent for $580 after expenses (lot rent, management fees), $800 total rent. We're selling this home for $31,000 to investors. That's a great return on your money, 20% +. Now here's where the right circumstances come in. We have it in our park, we completely manage it, (keep it leased, handle all repairs, pay it's bills) all you do it get paid at the end of the month.
Even if it's not rented for two months per year, something that we never let happen, in 10.5 years you've doubled your money and offset your income taxes from using the depreciation. We have homes that are still in our rental pools that are 40 years old and still pumping out good rents. Now there will be repairs and make-overs over the years, but we just did complete updates on 10 of our older homes, the average cost per home was $2,200. These are money making cows for sure, but only if they are managed right. And that's what we offer.
As of today we have over 50 homes in our rental pool and are adding weekly. All of our investors have started with one home after seeing it work, all have bought more. Most own 4 homes or more, one investor has 13.
I love it when I'm told, John I can buy that home for $20,000. My response is simple, yep that could be but you can't buy our service and knowhow for that. If you want to have those midnight calls and hammering tenants to pay the rent, you can do it cheaper. If you want a high return on your money and just get paid, this is the number one best way to do it.
Call me with more questions 361 522 5564