Investing in Mobile Home Parks: Exploring the Benefits and Considerations of This Niche Market

Introduction

As housing affordability continues to decline across the United States, investors are increasingly turning to mobile home parks as a viable and profitable alternative in the real estate sector. Mobile home park investing, once overlooked or misunderstood, is now gaining recognition as one of the most resilient and scalable strategies in real estate.

In this article, we explore the benefits and key considerations of mobile home park (MHP) investing, highlight current trends, and offer actionable insights for real estate investors who want to diversify their portfolios with this unique asset class.

What Are Mobile Home Parks?

Mobile home parks are communities where individual lots are rented to owners of manufactured homes (also called mobile homes). These homes are typically not owned by the park operator, instead, residents own their homes and pay a monthly fee for the land beneath them, plus utilities and maintenance costs.

This “land lease” model makes mobile home parks fundamentally different from traditional residential rentals or apartment complexes and is one of the reasons they offer unique investment advantages.

Why Mobile Home Parks Are Attracting More Investors in 2025

1. Demand for Affordable Housing is Skyrocketing

According to the National Low Income Housing Coalition, over 10 million U.S. households are considered severely cost-burdened, spending more than half of their income on housing. Mobile homes present one of the last remaining affordable housing options in the U.S., with average monthly lot rents ranging between $300 and $600.

According to one source:

“Mobile homes provide a viable option for working-class families priced out of traditional housing,” says John Fedro, an investor and mobile home mentor.

This rising demand creates a stable tenant base and reduced vacancy risk for park owners.

2. High Returns and Strong Cap Rates

Mobile home parks tend to deliver higher capitalization (cap) rates compared to other real estate asset classes. While apartment buildings may average a 4%–5% cap rate in 2025, mobile home parks often yield 6%–10%, depending on location and management quality.

This higher yield potential is particularly attractive to investors seeking passive income or faster equity growth.

3. Low Operating Costs and Maintenance

One of the biggest appeals of MHP investing is the relatively low cost of operations. Since tenants usually own and maintain their own homes, park owners are responsible only for maintaining infrastructure such as roads, water, sewer, and electricity.

This significantly reduces repair calls, turnover costs, and capital expenditures compared to multifamily buildings.

4. Lower Tenant Turnover

Because moving a mobile home can cost $5,000–$10,000, most tenants remain in place for years, if not decades. This makes tenant turnover rare and occupancy rates stable.

A report by Marcus & Millichap notes that mobile home parks have some of the lowest turnover rates in residential real estate, often under 5% annually.

5. Fragmented Market = Huge Opportunity

More than 70% of mobile home parks in the U.S. are still owned by mom-and-pop landlords. This fragmented ownership presents a major opportunity for investors to:

• Buy underperforming parks at below-market prices
• Add value through professional management
• Increase income through better utility billing and rent optimization

Key Considerations Before Investing

While the benefits are strong, mobile home park investing does come with specific challenges. Here’s what investors need to evaluate:

1. Zoning and Local Regulations

Local governments are not always friendly to mobile home parks. Zoning restrictions, rent control measures, or resistance to park expansion can limit profitability or future development.

Before purchasing, investors must:

• Review local zoning codes
• Evaluate legal non-conforming status
• Understand state landlord-tenant laws for mobile homes

2. Infrastructure Costs and Hidden Issues

A park may look great on paper, but aging infrastructure (especially private septic or water systems) can lead to major unexpected costs.

Look out for:

• Crumbling roads
• Old utility lines
• Sewer or water problems

Thorough due diligence – including a third-party inspection – is non-negotiable.

3. Tenant Mix and Ownership Percentage

Parks with a high percentage of park-owned homes (POHs) require more active management and repairs. On the other hand, tenant-owned homes (TOHs) offer a more passive experience and better long-term performance.

It is noteworthy to state that Parks with 80%+ tenant-owned homes are generally considered low-risk and easier to manage.

4. Financing Can Be Complex

Traditional banks may be hesitant to finance MHPs due to perceived risks or lack of understanding. Specialized lenders or private capital may be necessary.

Pro tip: Platforms like DealWorthIt make it easy to analyze MHP deals and package them in investor-ready formats to improve funding success.

5. Reputation and Community Image

MHPs sometimes carry negative stigma in certain areas, often due to past mismanagement or stereotypes. As an owner, part of your job may involve rebranding the park, improving aesthetics, and creating community engagement.

Case Study: A Real-World MHP Deal Analysis

Let’s look at a basic underwriting example using DealWorthIt, a real estate analysis platform used by thousands of U.S. investors.

• Park Location: Alabama (100 lots, 92 occupied, all TOH)
• Monthly Lot Rent: $350
• Gross Income: $386,400/year
• Operating Expenses: $105,000/year
• Net Operating Income (NOI): $281,400
• Purchase Price: $3.1M
• Cap Rate: 9.08%

DealWorthIt’s 1-click underwriting tool allowed the investor to compare this property to similar parks nationwide, stress test occupancy, and forecast investor returns – all within 10 minutes.

Mobile Home Park Trends to Watch in 2025

• REIT Activity: Companies like Equity LifeStyle Properties and Sun Communities continue to consolidate the space.
• Inflation Resistance: Rents can be increased annually with minimal tenant pushback.
• Green Upgrades: Solar power and EV infrastructure are slowly entering MHPs.
• AI and Analytics: Tools like DealWorthIt are allowing investors to forecast performance, identify acquisition targets, and value-add potential using predictive data.

Top U.S. States for MHP Investing in 2025

While good deals exist nationwide, these states are considered hotbeds for mobile home park opportunities:

1. Texas – Strong population growth, landlord-friendly laws.
2. Florida – Retiree-heavy demographics, consistent demand.
3. Arizona – Affordable living, large number of parks.
4. Alabama & Georgia – Lower acquisition prices, high yields.
5. Indiana & Ohio – Undervalued Midwest markets with upside.

Getting Started: Steps to Begin Your First MHP Investment

1. Learn the Basics
   Read books like “The Mobile Home Park Manifesto” by Glenn D Esterson and attend webinars.
2. Use Technology
   Platforms like DealWorthIt can help you:
   • Underwrite mobile home parks
   • Run comps and rent projections
   • Generate deal packets for partners and lenders
3. Build a Team
   Include a broker, attorney, property inspector, and lender familiar with MHPs.
4. Start Small
   Many investors start with 20–50 lot parks before scaling to 100+ lots.

Final Thoughts

Investing in mobile home parks is no longer a backwater strategy, it’s a legitimate, high-yielding asset class that offers recession resistance, low turnover, and strong demand in a housing-strapped economy. While challenges exist, they can be managed with careful due diligence and the right tools.

As the 2025 market favors efficiency, affordability, and scalable investments, mobile home parks offer an increasingly rare combination of cash flow, upside, and long-term stability. Whether you’re a new investor or looking to diversify, this niche might just be your next smart move.

Explore how DealWorthIt can help you evaluate mobile home park deals in minutes – not weeks.