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Commercialization of mobile home parks

Recently I’ve been reading a substantial amount of material published by Frank Rolfe.  Many of you have may have heard of him, but if not, Frank is on the leading edge of the commercialization of mobile home parks for the Great Plains and Southwest regions of the Country.  Frank’s park enterprise currently consists of more than 17,000 lots in 20 States.

Along with continuing in his own acquisition of privately owned parks Frank and his business partner travel the U.S. teaching courses from their Mobile Home Park University, a program designed to help deliver the tools for others to use parks as a lucrative source of income.  The University’s core platform is that mobile home parks have traditionally been privately owned by Mom & Pop style management teams, this type of management has kept park rental fees much lower than the rising rates of competitors such as apartment complex owners.  Over several decades of not increasing lot fees the average mobile home park rent is about $1,000 less than the average apartment (monthly).  These low fees have left the average mobile home park generating about $5 per square foot, lower than practically any other conceivable use for real estate.

The article covers several of the implications made by these chronically low rates, including why Rolfe sees such a great earning potential.  With roughly 44,000 parks in the United States and only 2,000 of them commercially owned, people looking to invest in the commercialization of mobile home parks are in a position to make a lot of money.  Rolfe explains that most of these parks could have their rental fees doubled over a period of time without having to greatly increase operating expenses.  The commercialization of these parks stands to create better living conditions for park residents as well.  Currently park managers earn about half of what apartment complex managers earn leaving the most experienced and qualified property managers headed toward apartment complexes.

It is a very logical conclusion that increased cash flow would allow for a park to dedicate a marginally larger piece of revenue to maintenance and grounds keeping, however this does not mean that all commercially acquired Mom & Pop style mobile home parks will result in better living conditions for residents.   I currently live in a park that was purchased by a commercial outfit and the first move they made was to increase lot fees.  Also, they have been less active and less approachable than the previous Mom & Pop management team.  This individual case does not discredit Rolfe’s hypothesis that commercialization will potentially lead to higher living standards; it does however demonstrate that lot fees can be increased without the commercial buyer having to increase operating expenses.

Click here to read the article.

September 9, 2015 Posted by | General Information | , , , , , | Leave a comment