While it’s true that retirement is no game, the process of providing a nice cash flow into your Golden Years is easier than you might think. Whether an investor with money to burn or a long-time owner of a mom and pop mobile home park, it’s time you looked at this particular brand of real estate as your final job, if you want to call it that.
It only takes one mobile home park of sufficient size to fund your retirement. How big does it need to be? How many lots? That depends upon what life style you want to indulge in during retirement. For example, let’s say you have a 100 lot park that pays for itself and provides enough cash flow to live on. The bills are paid, food sits on the table regularly but long dreamed of vacation trips to Acapulco and Greece remain firmly on the back burner.
How is that going to change in retirement if everything remains status quo?
The problem we’ve observed is that often times mobile home park owners have let their business savvy slip as time goes by. Increase the income on each lot by a mere $50 a month and you just added $5,000 a month to your income. Think you could take a trip every few months on that? The first thing to do is make sure your rental rates aren’t below market. If they are, raise them. It doesn’t matter if you’re great friends with the Winkelsons in space 129 who have been there for twenty years. We’re talking about business here. They’ve been getting a steal and things need to change. If your space rent is waaayyy below market rates, perhaps you could raise it in increments over the course of a few years.
Another money waster in your park is likely your water and sewer system, which has been known to routinely consume 10% of total revenue. Are you paying for it? If you are, quit, and shift the cost to your residents. Paying their own utilities is not a sadistic request. They’re using the darn stuff; let them pay for it. Now consider that with two easy policy changes you have turned your “okay” mobile home park investment into a cash flow machine. Don’t sit around wondering why you couldn’t do the same.
Like Nike says, just do it.
The MHP Listings Team
Flickr / The Consumerist