Investing in Apartments vs. Mobile Home Parks PDF Print E-mail
Written by Diane Ayers   
Monday, 08 March 2010 22:59
Which one to buy - mobile home park or apartment complex?
by DianeAyers


Which one to buy - mobile home park or apartment complex?

We have used both for our investments and we have a definite opinion! After experiencing both, we are no longer interested in apartments. Here's why:

Land versus buildings is the key to your initial investment requirements. Of course, you pay more for apartment buildings than you do for spaces in a mobile home park. Individual properties may be the exception, but this is usually the case.

In any business, you need to look for tax savings. Those dollars are needed in other places. With our current tax laws, you can save 1/2 on depreciation alone. Land improvements such as paving, new utilities, fencing, etc. may be depreciated over a period of 15 years. Apartment buildings, on the other hand, are on a 27.5 year schedule.

If you are interested in using mobile homes in your park as rentals, they must be put on the 27.5 year schedule. However, and this is a big plus, your cost for the home will be substantially less than for apartments.

Repairs are easier with mobile homes as they are stand-alone compared to the common walls in apartments. You generally do not have to tear out walls to repair plumbing as the pipes are under the mobile home.

For parks with spaces only, the need for repairs is low.

Vacancy rates are another reason to choose mobile home parks over apartments. Mobile home owners who will be renting a space from you face a large moving bill should they wish to relocate to another park. Most will not move as long as you are maintaining a clean and safe environment. If you go the extra mile and develop a community, people will not want to move from your property.

Apartment tenants move much more often, so for stability choose the mobile home park.

Careful screening of applicants, good management, and high quality property maintenance are the ingredients you need to have in place for either type of investment.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Learn mobile home park management with step-by-step instructions and videos. Our property management module is for owners and property managers who want to operate a mobile home park. Visit us at MobileHomeParkClassroom.com today!