By Jack Miller
I know a fellow who is able to buy inexpensive land on which to develop his own mobile home condominium communities. Each lot is separately platted and deeded. His costs to develop an up-scale mobile home subdivision are approximately $10,000 per lot. The retail market value of finished individual lots with curbing, gutters, paved streets, wiring for cable TV, with all connections to the lot is about $45,000. There is a ready market for these lots at that price. Being able to create something and sell it for more than four times the cost is a pretty good business, but it can get to be a lot better when you plug in new mobile homes.
Mobile home manufacturers are extremely flexible when someone contracts to buy a large number of units from them. They'll change floor plans and exteriors, add amenities and appliances, and even furnishings, for the right price. When a new mobile home costing $40,000 is added to one of the above new lots, it can be sold and financed for $99,000. The little effort required to have a mobile home selected from among several designs by a buyer and installed on a lot earns the developer an additional $14,000 profit. There's still more to this than meets the eye.
It's a lot easier to get people to buy a mobile home lot when they can also buy a brand new home designed to meet their needs, and furnished with the appliances, carpets, and window coverings of their choice than it is to get them to buy the naked lot. Because more lenders are willing to lend at more reasonable terms on a new home placed upon permanent foundations, payments are comparable to buying a house. Why do people prefer to pay as much to buy mobile homes on lots as they would on houses? Amenities!
Unlike a new stick-built housing tract, a mobile home subdivision is really a tidy, controlled, sometimes gated, community of people of about the same income level living in homes that are all in comparable price range. Mobile home communities frequently include amenities such as swimming pools, on-site maintenance people, play areas for kids, jogging paths, community centers, cable TV, etc. And they are very secure; often with gates that require entry codes. Break-ins, muggings, molestation of children are virtually non-existent in up-scale mobile home communities. The community association can maintain standards for lawn maintenance, outside storage, signs, noise control, parking, pets, etc. that neighborhoods rarely can. When sited in these settings and maintained properly, mobile homes appreciate just like other kind of housing. Buyers can see what they are getting, and have a quality home built to rigorous specifications, delivered, set up, financed, and occupied days after making their purchase, whereas a stick-built home might take months, and then still not be built as advertised.
The mobile home market is growing and prices are rising. More people from newly weds to retirees are choosing to live in mobile homes. That opens up other venues to the developer or mobile home park owner. Typically, a 100 space mobile home park represents about 300 residents. They need food, water, fuel, insurance, appliances, etc. They might want to add room additions, storage sheds, awnings or carports to their homes. They might need to finance these. Kids and elderly occupants may need a day care center. They might want to take day-trips for shopping or recreation. All of can provided by the owners or managers at a profit.
When Association By-Baws or Park Regulations prohibit storage outside the home itself, it creates a market for mini-storage units that add to the bottom line. Typically, park-owned units rent for just under the costs of comparable commercial mini-storage units of the same size. I've seen mini-storage units erected in park areas which would otherwise be wasted to produce added income. In other instances, units have been placed around the perimeter of a community to serve as a barrier to keep uncontrolled visitors out. In addition to providing conveniently located storage space to residents. Additional revenue can be generated by setting aside fenced space for storage of boats and recreational vehicles. As a general rule, costs for open storage run between $20 and $35 per vehicle. The larger the park, the more profit centers you can create.
