Where are the best places to invest in mobile home parks?
Location can make a significant difference is investment results. Yet, America is a really big place, with many different markets, all operating at different levels. So where are the best places to source mobile home park investment opportunities?
The Best States for Real Estate Investors
One of the easiest ways to start breaking down your search area is by which states favor your type of investing. For example; some states can be far friendlier for flipping real estate. Others can be divided between being friendlier to landlords or tenants.
Landlord Friendly States
States whose laws and legal systems generally side in favor of landlords are dubbed more ‘landlord friendly states’. This may also include; easier and faster evictions, and lower cost evictions.
According to RentersInsurance.com these are 8 states with rental laws favoring landlords:
States like FL can make it a breeze to evict in tenants in just a few days. Then there states like MA which can be absolutely brutal to landlords and put them at massive exposure to risk to malicious and manipulative tenants.
Rent Control is considered with one of the worst and most oppressive regulations on landlords by many. According to Landlord.com these US states have cities with rent control laws:
- District of Columbia
- New Jersey
- New York
Ironically Forbes proclaims that America’s rent controlled cities are also its least affordable. What can make it difficult for income property investors is that rent control laws are also localized. So honing in, what are some of the cities that income investors may be attracted to?
America’s Best Cities for Investors
For many reasons savvy investors flock to America’s biggest cities to invest.
They often offer:
- Large demand for housing
- Easier financing
- More transaction volume
- Higher rental rates
- Protection from the downside
This is why the world’s wealthiest investors have and will keep on investing in places like London, Hong Kong, New York, San Francisco, and Miami. This is true even when the profits and yields don’t appear to make sense to others.
For those not finding what they want in these specific cities check out the largest cities in each state. The United State Census Bureau says that as of 2015 ten US cities now have crossed the 1 million or more residents’ threshold. Wikipedia also offers a list of US cities by population.
The benefits of investing in large cities doesn’t just apply to the official urban core. They can apply to strong Metropolitan Statistical Areas (MSAs). There are 574 primary statistical areas, and over 1,000 other combined statistical areas.
As a good rule of thumb look for mobile park investment opportunities within 20 minutes’ drive of cities.
More important than size itself buy and hold investors are really looking for more linear, predictable markets. It is completely possible to make great money in boom and bust markets. Yet, those desiring consistent income, and the freedom to sell at any time in the future will trend to more stable markets.
Past performance and reputation are a start in short listing some of these markets, as well as overlaying the filters already laid out in this report. Of course real estate markets, like the economy, are rarely just stuck in limbo. They are always trending up or down, even if it is minimally.
Ways to track these trends include:
Additional hacks may include following the roll out of Google Fiber, or tracking the progress of businesses like Walmart and Starbucks. It is said the data proves a close by Starbucks tangibly lifts the value of real estate. And it is rare to see a Starbucks close its doors. Walmart has a reputation for going into emerging communities, and often may even be partially responsible for building them up, and raising local property values. Walmart Realty’s website can be used to track buildings and Walmart leasing activity.
Where are People Moving to?
Where people are moving is where mobile home park investors will find much of the best growth. Population growth breathes more health, strength, and vibrancy into real estate markets. The above factors can be great indicators of where growth is going. But there are other tools for specifically tracking these trends, and anticipating them too.
Even if a major federal tax overhaul comes, unlikely to dramatically change property taxes, and other state specific taxes. People will continue to trend toward lower tax destinations. This is especially true for businesses and investors. So know your states with the highest and lowest taxes.
Going back to the ‘Walmart Effect’ it is also worth keeping an eye on top employers, where they are expanding to, and the diversification of employers and industries within a state, region, and city. Statistic Brain maintains a list of the nation’s largest employers. MSN and 24/7 Wall St. offers a slide show of the Largest Employer by State.
For those who prefer to rely on hard data over forecasts, U-Haul publishes a regular list of top destination and growth cities. The US Census provides a variety of data on state to state migration, desire to move and residential mobility, and demographically segmented migration. Forbes’ list of America’s Fastest Growing Cities in 2015 includes; Houston, Denver, Raleigh, and Austin, and San Francisco.
Deciding on the right market is both an art and a science. It’s a science because you’re using research to gather data; it’s an art because the data doesn’t reveal your decision, you have to interpret it!