Think outside the box with your real estate investments

real estate investments

Got money to invest in real estate and do not want to follow the crowd?

In early December, my wife and I took our Roadtrek on the road for ten days. We wanted to get away but not too far so we decided on Tennessee. We hiked in the Great Smoky Mountains, visited Nashville and the Grand Ole Opry and finally Memphis, home of Elvis (and the ancient Greeks). When we got home, my wife after paying off our American Visa Card told me that we spent about $1500. If you eliminate the $500 on Christmas gifts and cowboy boot shopping we spent about $100 a day. 

The Roadtrek is essentially a converted cargo van. It is self contained with solar power on the roof, a fridge, gas range, toaster oven, bed and bathroom with a shower…you can essentially camp overnight anywhere that you can find a flat parking space with the need to find a campground to fill up with fresh water and dump your grey and black water every five (or so) days. The onboard batteries charge when driving and by solar. 

As we are new at this, we are not expert “boondockers” and since the weather was a little chilly and because I was a little under the weather, we ended up only boondocking (aka dry camping) only three times. As such, our biggest expense was paying for camping grounds. 

Some of the campgrounds we stayed at had permanent residents. These were camp grounds not mobile home parks. That got me to thinking.

Non-traditional investments

A few years ago, I was hired to exclusively advertise for investors for a new project – a retirement home in Listowel. (I passed the opportunity up to my brokerage to do that as they have the resources). I’m not an expert on investment opportunities, but the numbers looked really great with guarantees for ‘renters’ much like the way we sell purpose-built student accommodations near the universities in Waterloo. The project, like many, never did get off the ground but I filed that experience away as a way to help real estate investors see ‘outside the box’. There are many kinds of real estate investors and many many real estate investment opportunities and over the years I have worked with a spectrum of types from plug and play turn key student condos to down to the studs rehabilitation renovation flips. 

As a non-traditional real estate investment vehicle, let’s talk about the advantages of investing in trailer parks (mobile home parks or RV parks if you prefer).

Why investors could consider trailer parks as investment vehicles.

They are not ‘sexy’ investment properties, far from it. But trailer parks do have a few built in advantages:

  • They have a dramatically lower turnover: Only about 2% of the homes leave trailer parks every year, versus the average apartment tenant yearly turnover, which was 53% in 2015.
  • Mobile home parks have lower operating and capital expenses due to fewer maintenance costs and amenities: They rent land, which is pretty cheap to maintain.
  • They have less volatile rents due to reduced competition. There is essentially no new supply of mobile home parks. Strict zoning laws make them nearly impossible to build. Compare that to apartments buildings, of which more than 350,000 new units were built last year. 

Smart investors do not follow always follow the crowd.

The point of this blog post is not for the nascent investor to go out and suddenly start investing in mobile home parks, though that might not be such a bad idea. The point is to think outside the box. Almost all new real estate investors I talk to have similar ideas of what an investment property looks like (an old house and a pre-construction condo unit are the top two). There are dozens of other investment vehicles, many with better returns. Most investors never consider RIETs, retirement communities, office properties, retail properties, hotels, industrial properties and of course mobile home parks. 

Please send me an email if you would like to talk about it. 

Source: Should You Invest In Mobile Home Parks? Only If You Like Consistent Returns

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