Mobile Home Park Investing: A Deep Dive Into One of Real Estate's Best-Kept Secrets

Mobile home parks—or manufactured housing communities (MHCs)—are among the highest-returning, most recession-resistant asset classes in real estate. While institutional investors have been quietly acquiring parks for over a decade, individual investors can still find and operate profitable parks with the right approach.

This isn't a feel-good overview. This is the operational reality of buying, managing, and profiting from mobile home parks, including the parts that make it genuinely hard.

Why Mobile Home Parks?

The investment thesis is built on fundamentals that are difficult to replicate in other asset classes:

Supply Is Shrinking

Approximately 50,000 mobile home parks exist in the United States. No new parks are being built in most markets. Zoning restrictions, NIMBY opposition, and the economics of land development make new MHP construction extremely rare. When parks close (typically redeveloped into higher-density housing or commercial), the supply permanently shrinks.

Between 1999 and 2023, the U.S. lost an estimated 4,000+ mobile home parks to redevelopment. That's about 170 parks per year disappearing—and accelerating in high-growth metros.

Demand Is Structural

Approximately 22 million Americans live in manufactured housing. For households earning $30,000-$50,000 annually, a mobile home park offers housing at $400-$800/month—dramatically less than apartment rents in most markets. As housing affordability worsens, this demand grows.

The Lot Rent Model

This is the key insight. In a well-run park, you don't own the homes—the tenants do. You own the land and infrastructure (roads, water lines, sewer, electrical). Tenants pay you lot rent for the space their home sits on.

Why this matters:

• No building maintenance. The tenant owns and maintains their home. You maintain the common areas and infrastructure.
• Extremely sticky tenants. Moving a mobile home costs $3,000-$10,000+. Most never move. Average tenure is 10-15 years compared to 2-3 years for apartment tenants.
• Low turnover costs. When a lot-rent tenant leaves, you don't need to renovate a unit. You prepare the lot (maybe $500-$2,000) and fill it.
• Predictable cash flow. Long-term tenants paying lot rent create annuity-like income streams.

The Numbers

Well-operated parks generate:

• Cap rates: 7-12% at acquisition for value-add deals; 5-8% for stabilized parks
• Cash-on-cash returns: 12-25% with leverage
• Expense ratios: 30-45% (compared to 45-55% for apartments)
• Lot rent: $200-$800/month depending on market (national average around $350)

A 50-lot park at $350/month lot rent, 90% occupancy generates:

• Gross income: $189,000/year
• [Operating expenses](/blog/net-operating-income-guide) (40%): $75,600
• NOI: $113,400
• At a 9% cap rate, the park is worth ~$1.26 million

How to Evaluate a Mobile Home Park

The Five Critical Factors

1. Infrastructure

This is your biggest risk and your biggest expense if you get it wrong.

• Water system — municipal (city water) or private well? Municipal is strongly preferred. Private wells require DEQ/EPA compliance, water testing, and can cost $50,000-$200,000+ to replace. Wells serving 25+ connections are regulated as public water systems.
• Sewer system — municipal sewer, private septic, or lagoon? Municipal is best. Septic systems serving multiple homes require periodic pumping ($300-$500 per tank) and eventual replacement ($5,000-$15,000 per unit). Lagoons are the most challenging—heavy regulatory burden and potential environmental liability.
• Roads — paved, gravel, or dirt? Paving a park costs $15-$25 per square foot. Gravel roads need annual maintenance.
• Electrical — individually metered (tenants pay their own electric) or master-metered (you pay and bill back)? Individual meters are preferred. Master-metered systems lose 10-20% to line loss and create billing disputes.
• Gas — natural gas, propane, or electric heat? Natural gas is cheapest and preferred. If the park has a central propane system, it's your responsibility and expense.

2. Occupancy and Lot Count

• Current occupancy — how many lots have paying tenants? Below 70% occupancy needs explanation and likely a deep discount.
• Total lots vs. usable lots — some lots may be too small for modern homes, have utility issues, or violate current setback requirements.
• Park-owned homes (POHs) vs. tenant-owned homes (TOHs) — TOHs are your cash cow. POHs are a management headache. A park with 30% POHs means you're also in the [property management](/blog/property-management-complete-guide) business for those units.

3. Lot Rent Analysis

• Current lot rent vs. market — if the park charges $200/month and comparable parks charge $400/month, you have significant upside. Raising lot rent is the primary value-add play.
• Rent increase history — has the current owner raised rents in the last 5 years? If not, tenants may resist increases (even justified ones).
• Market rent comps — call other parks in the area. Ask what they charge for lot rent, what's included, and what their vacancy looks like.

4. Market Fundamentals

• Population growth — investing in declining markets (shrinking rural towns) creates long-term vacancy risk
• Employment diversity — a park next to a single employer (military base, factory) is vulnerable to that employer's fortunes
• Median household income — your tenants need to earn enough to pay rent reliably. Target markets where lot rent is 25-30% or less of the median household income in the $30,000-$50,000 range.
• Competing parks — how many other parks are nearby? Are they full? This tells you about demand.

5. Regulatory Environment

• Rent control — some states and municipalities cap lot rent increases. New York, California, and several other states have MHP-specific rent control provisions.
• Tenant protections — eviction processes vary dramatically. Some states require 60-90 days notice for lot rent increases.
• Zoning — verify the park is legally zoned as a mobile home park. Non-conforming use (grandfathered) parks can't expand and may face restrictions.

Due Diligence Checklist

Before closing on any park:

• Walk every lot and inspect every home's exterior condition
• Inspect all infrastructure (water, sewer, electric, roads)
• Review 3 years of financial statements (income, expenses, tax returns)
• Verify rent roll accuracy (contact tenants directly)
• Pull water/sewer compliance history from the state DEQ
• Review all leases and lot rental agreements
• Get Phase 1 environmental assessment ($2,500-$4,500)
• Obtain infrastructure inspection from a qualified engineer ($3,000-$8,000)
• Verify zoning and any conditional use permits
• Check for pending litigation
• Review capital expenditure history and project future needs
• Verify insurance claims history

Budget 60-90 days for thorough due diligence. Rushing due diligence on a mobile home park is the fastest way to buy a money pit.

Financing Mobile Home Parks

MHP financing is different from single-family or multifamily. Here are your options:

Seller Financing

The most common financing for smaller parks (under 50 lots). Many mom-and-pop owners will carry financing because:

• They want to spread out capital gains tax
• The park doesn't qualify for conventional financing (infrastructure issues, low occupancy)
• They want a reliable income stream in retirement

Typical terms: 10-20% down, 5-7% interest, 10-20 year amortization with a 5-7 year balloon. Negotiate aggressively—seller-financed deals give you the most flexibility.

Local/Regional Banks

Community banks and credit unions are your best bet for bank financing. They understand local markets and are more flexible than national lenders.

Typical terms: 20-25% down, 5-7% interest (variable), 20-25 year amortization with 5-year renewals. They'll want to see a 1.25x+ [debt service coverage ratio](/blog/best-dscr-lenders-2026).

Agency Debt (Fannie Mae/Freddie Mac)

For larger, stabilized parks (100+ lots, 80%+ occupancy, good infrastructure). Agency loans offer the best terms:

• 75-80% LTV
• 30-year amortization
• Fixed rates for 5, 7, 10, or 12 years
• Non-recourse (your personal assets aren't at risk)
• Minimum loan size typically $1-$2 million

CMBS Loans

[Commercial mortgage](/blog/commercial-mortgage-guide)-backed securities loans are available for parks that don't quite meet agency standards. Higher rates and more rigid terms, but non-recourse and available for stabilized parks.

SBA Loans

SBA 7(a) loans work for owner-operator purchases. 10-25% down, up to 25-year terms, competitive rates. The SBA process is slow (60-90 days) and paperwork-heavy, but the terms are good for first-time park buyers.

Operations: Running a Mobile Home Park

Raising Lot Rent

This is your primary value driver. If lot rent is $100-$200 below market, bringing it to market adds significant value.

[How to raise rent](/blog/how-to-raise-rent) without mass exodus:

• Gradual increases — $25-$50/year rather than $150 all at once
• Improve the park first — fix roads, clean up common areas, enforce rules, then raise rent. Tenants accept increases when they see improvements.
• Provide notice — give 60-90 days written notice regardless of what your state requires. More notice = less resistance.
• Be transparent — explain what the money is going toward (infrastructure, improvements, market adjustment)
• Know your state's rules — some states cap annual increases or require specific justification

The math: Raising lot rent by $50/month across 40 occupied lots = $24,000/year in additional NOI. At a 9% cap rate, that's $266,667 in added property value. One rent increase can create more equity than most fix-and-flip profits.

Filling Vacant Lots

Empty lots are your biggest opportunity and challenge.

Options for filling lots:

1. Move in used homes — buy used mobile homes for $5,000-$20,000, move them onto vacant lots ($3,000-$8,000 for transport and setup), and sell or rent them
2. Incentivize new home purchases — partner with manufactured home dealers. Offer move-in incentives (free lot rent for 2-3 months)
3. Rent-to-own programs — buy homes and offer them to tenants on lease-purchase terms. You fill the lot and eventually convert to a TOH.
4. Marketing — list vacant lots on Craigslist, Facebook, local classifieds. Many people own mobile homes on rented land and would move for a better park.

Dealing with Park-Owned Homes

POHs create cash flow but also create headaches: maintenance, turnover, renovation, tenant damage. The long-term strategy for most investors is to convert POHs to TOHs.

How to convert:

• Offer homes to existing tenants at below-market prices
• Finance the sale yourself (down payment + monthly payments)
• Include a clause that lot rent continues regardless of home ownership
• Once the tenant owns the home, your maintenance obligation drops to zero

Enforcement and Community Standards

Parks decline when rules aren't enforced. Common issues:

• Abandoned vehicles and junk
• Unauthorized structures and additions
• Pet violations
• Home exterior deterioration
• Noise and disturbances

Enforce rules consistently and fairly. Send written notices, document everything, follow your state's [eviction process](/blog/how-to-handle-eviction) when necessary. The short-term discomfort of enforcement creates long-term value.

Submetering Utilities

If the park is master-metered (you pay the utility bill), install submeters and bill tenants directly. This alone can save $50-$150/lot/month.

Cost to submeter: $1,000-$3,000 per lot for water/sewer; $500-$2,000 per lot for electric. Payback period: 6-18 months.

Most states allow submetering with certain disclosure requirements. Check state utility commission rules.

Value-Add Playbook

The typical value-add MHP investment follows this playbook:

Year 1:

• Take over management
• Audit all expenses
• Begin infrastructure improvements
• Raise lot rent $25-$50
• Submeter utilities if master-metered
• Begin filling vacant lots
• Enforce community rules

Year 2:

• Continue filling vacant lots
• Second lot rent increase
• Convert POHs to TOHs
• Refinance to pull out initial equity if values support it

Year 3-5:

• Stabilize at 90%+ occupancy
• Lot rent at market rate
• All homes tenant-owned
• Clean infrastructure
• Refinance or sell at stabilized value

Example value-add scenario:

Purchase at $924,000 with 20% down ($184,800). After 3 years, the park is worth $1.68 million. That's $756,000 in equity created—a 409% return on invested capital, not counting cash flow along the way.

Risks and Challenges

Infrastructure Failure

A collapsed sewer line can cost $50,000-$200,000 to repair. A failed well serving 50+ homes is a regulatory emergency. Always budget 10-15% of NOI for capital reserves.

Regulatory Risk

Rent control legislation, tenant protection laws, and environmental regulations are all evolving. Some states are becoming more landlord-friendly for MHPs; others are tightening restrictions. Stay informed about state and local legislative trends.

Reputation and Stigma

"Trailer park" carries stigma. Some lenders, investors, and community members will look down on this asset class. The industry is moving toward "manufactured housing community" branding for good reason. If reputational risk bothers you, this isn't your asset class.

Tenant Relations

MHP tenants are often lower-income, which means higher sensitivity to rent increases and economic downturns. During the 2008-2009 recession, MHP occupancy remained above 90% nationally while apartments dropped below 88%. MHPs are recession-resistant, not recession-proof.

Environmental Liability

Older parks may have underground storage tanks, lead pipes, or soil contamination. A Phase 1 environmental assessment is non-negotiable.

Getting Started

Your First Park

Look for:

• 30-80 lots (small enough to manage, large enough to matter)
• Municipal water and sewer (avoid private systems on your first deal)
• 70-85% occupancy (room for value-add without a turnaround)
• Lot rent 20-40% below market (your primary upside)
• Seller financing available (easier to close, better terms)
• Within 2-3 hours of where you live (you need to visit regularly in year one)

Where to Find Parks

• LoopNet and Crexi — commercial listing platforms
• MHPStore and MobileHomeParkStore — MHP-specific marketplaces
• Direct mail to park owners — pull owner info from county records
• MHP brokers — specialists like The MHP Broker, Colliers, or Marcus & Millichap manufactured housing divisions
• Networking — MHP conferences (MHI Congress, Frank Rolfe's Boot Camp) and online communities

Education Before Action

• Frank Rolfe and Dave Reynolds (Mobile Home University) — the most comprehensive MHP education program
• MHP-focused podcasts: The Mobile Home Park Podcast, Park Place Podcast
• BiggerPockets MHP forum — active community of park investors
• State manufactured housing association — your state's association provides regulatory guidance

Frequently Asked Questions

How much does a mobile home park cost?

Small parks (20-40 lots) typically sell for $500,000-$2 million. Mid-size parks (50-100 lots) range from $1.5-$6 million. Large parks (100+ lots) can exceed $10 million. Price depends on location, occupancy, lot rent, infrastructure condition, and market fundamentals.

Can I manage a mobile home park remotely?

Yes, but not on day one. Most successful remote operators spend 6-12 months hands-on before transitioning to remote management with an on-site manager ($30,000-$45,000/year salary plus a free or discounted lot). Third-party MHP management companies exist but are less common than apartment management firms.

What's the biggest mistake new MHP investors make?

Underestimating infrastructure costs. A park that looks great on paper can have $200,000 in deferred maintenance hidden underground. Get a professional infrastructure inspection. Budget for the worst-case scenario.

How do mobile home parks perform in a recession?

Historically, very well. During the 2008-2012 downturn, MHP occupancy and rent collections remained strong because tenants had nowhere cheaper to go. Demand actually increases during recessions as people downsize from apartments and houses into manufactured housing.

Are mobile home parks ethical investments?

This is a fair question. You're providing affordable housing that wouldn't exist otherwise. The ethical line is in how you operate: maintaining safe living conditions, raising rents gradually and fairly, investing in infrastructure, and treating tenants with respect. Predatory operators who buy parks, jack rents 50%, and let infrastructure decay give the industry a bad name.

Do I need experience in real estate to invest in MHPs?

Prior real estate experience helps but isn't required. MHP operations are more similar to running a small business than managing traditional real estate. Strong candidates have experience in management, operations, or small business ownership. Start with education, visit parks, talk to operators, and find a mentor or partner for your first deal.

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