Mobile home park investing offers strong potential returns, but the best deals aren’t always obvious. Many investors focus on stabilized properties with consistent occupancy and income, but those deals often come at a premium. The real upside is usually in finding mobile home park investments with hidden value-add potential—opportunities that others overlook but can be improved to generate higher return potential.

Identifying these properties requires looking beyond surface-level metrics. Factors like mismanagement, under-market lot rents, operational inefficiencies, and overlooked infrastructure improvements can all create hidden value. Here’s how to find mobile home park investments with untapped upside.

Target Underperforming Mobile Home Parks

Not every mobile home park operates at full efficiency. Some owners, especially long-time operators, may have outdated business practices that limit profitability. Common indicators of underperformance include:

• Below-market lot rents compared to surrounding properties
• High vacancy rates despite strong local demand
• Poor management leading to tenant turnover and unpaid rent
• Deferred maintenance affecting the community’s appeal

These mobile home parks often sell at a discount because their financials don’t reflect their full potential. Investors who can improve operations, enforce collections, and implement modest rent increases may see significant appreciation.

Look for Lot Rent Disparities

One of the biggest hidden value-add opportunities in mobile home park investing is under-market lot rent. Many long-term owners avoid rent increases, keeping lot rents significantly lower than comparable communities in the area.

To identify these opportunities:

1. Research market rent data using industry reports or local comps.
2. Compare the subject mobile home park’s lot rent to the area average.
3. Evaluate the feasibility of incremental rent increases without excessive tenant turnover.

A small rent adjustment can drastically improve the property’s net operating income (NOI) and increase its valuation potential. For example, a $50 monthly rent increase across 100 occupied lots could add $60,000 in annual revenue. At a 7% cap rate, that alone could add over $850,000 in property value.

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Identify Poorly Managed Properties

Mismanagement is one of the biggest reasons a mobile home park underperforms. Some owners fail to enforce lease agreements, neglect rent collection, or lack proper maintenance schedules. This can lead to lower cash flow and tenant dissatisfaction.

Signs of poor management include:

• Inconsistent rent collection with high delinquency rates
• Unenforced rules resulting in a deteriorating community appearance
• Frequent tenant complaints or high turnover
• Lack of basic infrastructure upkeep

An investor with an experienced management team can often turn these properties around by improving collections, enforcing rules, and addressing long-standing operational inefficiencies.

Check for Infrastructure Issues That Can Be Fixed

Some mobile home parks are overlooked due to perceived infrastructure problems. Investors willing to assess these issues carefully can sometimes find hidden value in properties that others dismiss too quickly.

Potential opportunities include:

• Master-Metered Utilities – Converting from master-metered to direct-billed utilities or using smart meters can shift costs to tenants and increase NOI potential.
• Septic to City Sewer Conversions – Connecting to municipal sewer systems can reduce long-term maintenance expenses and can improve valuation.
• Road Repairs and Landscaping – A neglected community may need basic improvements to attract better tenants and justify rent increases.

While infrastructure improvements require capital, they can lead to long-term appreciation and operational savings.

Target Mobile Home Parks With Vacant Lots

Vacant lots in a mobile home park may initially seem like a problem, but they can present a major value-add opportunity. Many lenders and institutional buyers favor mobile home parks with higher occupancy, leading some investors to overlook parks with empty spaces.

Opportunities exist when:

• The market has demand for affordable housing, making it possible to fill vacant lots.
• The infrastructure (water, sewer, electrical) is already in place, reducing setup costs.
• The operator can offer incentives like “move your home for free” to attract new tenants.

Even filling just a few vacant lots can significantly increase NOI and make the mobile home park more attractive to future buyers.

Find Off-Market Deals for Better Pricing

Many mobile home park deals with the best value-add potential never hit the open market. Off-market deals often provide better pricing because they involve direct negotiations rather than bidding wars.

To find off-market opportunities:

• Cold call potential sellers.
• Build relationships with mobile home park owners who may be looking to sell quietly.
• Work with brokers who specialize in mobile home parks and have insider access to sellers.
• Use direct mail or network at industry events to source deals before they go public.

Off-market acquisitions often come with more favorable pricing and terms, which can allow investors to secure properties below market value.

Evaluate Local Regulations and Market Trends

A mobile home park’s potential isn’t just about its current performance—it’s also influenced by local regulations and market conditions. Some areas have pro-tenant laws, rent control policies, or zoning restrictions that can limit upside potential.

Before investing, research:

• Whether the state or county has rent control laws that could cap future rent increases.
• If zoning laws prevent adding new homes or expanding the community.
• Market demand, job growth, and economic trends in the area that affect long-term tenant stability.

A mobile home park in a landlord-friendly state with a strong economy often provides more room for improvement and long-term appreciation.

Consider Mobile Home Parks With Park-Owned Homes

Many investors prefer mobile home parks where tenants own their homes and rent only the land. However, mobile home parks with park-owned homes (POHs) can offer a value-add opportunity if structured correctly.

If a mobile home park has a high percentage of POHs, investors can:

• Sell the homes to tenants over time, transitioning them to tenant-owned homes (TOHs).
• Reduce maintenance responsibilities by shifting ownership while increasing lot rent.
• Improve community stability, as homeowners tend to stay longer than renters.

Successfully converting POHs to TOHs can significantly reduce expenses and improve the property’s long-term value potential.

Final Thoughts

Finding mobile home park investments with hidden value-add potential requires looking beyond surface-level numbers. Under-market lot rents, poor management, deferred maintenance, vacant lots, and infrastructure inefficiencies all create opportunities that many investors overlook.

By identifying and implementing strategic improvements, investors can increase NOI potential, drive appreciation, and create a more attractive asset for future buyers. While no investment is risk-free, those who recognize the untapped potential in mobile home parks may position themselves for higher returns in a competitive market.

Are you looking for MORE information? Book a 1-on-1 consultation with Andrew Keel to discuss:

• A mobile home park deal review
• Due diligence questions
• How to raise capital from investors
• Mistakes to avoid, and more!

Disclaimer:

The information provided is for informational purposes only and is not investment advice or a guarantee of any kind. We do not guarantee profitability. Make investment decisions based on your research and consult registered financial and legal professionals. We are not registered financial or legal professionals and do not provide personalized investment recommendations.