Long term tenants are highly prized by buy and hold income investors. Mobile home park tenants are known for some of the best longevity in the industry. So why do these clients stay so long? What are the benefits for investors? How can you spur more of this trend?
Long Term Tenants
Investors and financial analysts are increasingly recognizing the importance and value of long term tenants. Longer term tenants are deemed to be more profitable for landlords. Lower turnover rates mean lower costs for property owners. This eliminates the need for constant updates, the cost of marketing for new tenants and screening them. It also means reducing risk of vacancy. Remember once units go vacant there are little guarantees. And if units go vacant at the wrong time it could potentially mean needing to offer incentives or even lower rents. The consistency and higher income long term tenants also elevates property value and resale potential.
Fortunately, mobile home parks are known for delivering on longer term tenants compared to apartments and single family residences.
Why Mobile Home Parks are a Magnet for Long Term Tenants
It may be sad; it is true that is can be very hard to move up for many. It’s also much easier to downsize, and ultimately many will end up downsizing during their senior years.
Owners vs. Renters
Recent data shows that renters often stay less than one year on average, versus property owners which are more likely to stay seven years. What’s unique about mobile home park tenants is that they normally own their units, and simply rent the lot. This definitely extends the life of ‘renters’, especially since it can be so expensive to relocate units.
Mobile home parks offer a sense of community. Some park owners and managers curate communities better than others. Yet, all have the ability to build community, and that can develop tenant loyalty far beyond price. Done right this can turn residents into raving fans which become your best marketers, and will bring in their friends and family too.
Locking in Affordability
One of the chief concerns out there today is the ability to lock into affordable housing. Renters know that they simply can’t afford to keep paying higher rents on condos and single family homes. Even owners with adjustable rate mortgages and HELOCs can already be feeling the pinch of rising interest rates. Mobile homes offer the most affordable option. Once residents lock in this level of affordability, most are not going to want to give it up.
All of the above are reasons individuals, couples, and families are drawn to mobile home park living. It’s affordable, it offers a great community living experience, and a chance at ownership.
In turn this makes mobile home parks a great investment. Long term tenants that really don’t want to leave, and help to build the community are not just easier to manage, but more profitable in many ways. While this may just be one of the reasons to invest in the sector, it is an important one which sophisticated investors are really just getting a handle on.