The most powerful aspect of real estate investing is the many different ways that exist to make money. Even if you’re just starting out and you’re low on funds, there are many different options out there that can help you generate income with no money down.

The often-overlooked strategy with a low barrier to entry is investing in a mobile/trailer home. Mobile homes are not common amongst real-estate investors for a multitude of reasons; ranging from the slow appreciation of the property to volatile rent lot prices.

But, they make for a great addition to your real estate portfolio, and finding your niche in this market long-term can help create wealth for years to come. All it takes is one property to start your journey, once the ball starts rolling, it becomes easier to purchase the next, and the next, and so on.

Here are 6 ways to make a 1,000 a month with a mobile home/trailer home

1. How To Airbnb a Mobile Home

One of the first wake-up calls to investing in mobile homes was an experience I had visiting my little brother’s new place. He called himself moving out of my parent’s house into an apartment; when I arrived I realized it wasn’t an apartment at all, or anything close to it. It turned to be a mobile home located in a prominent area of Huntington beach. The layout was a four-bed two bath with several parking spaces in front for the tenants.

After finding out that the home was owner-occupied, curiosity led me to chat with the owner to see exactly what his strategy was for renting out his property.

Soon after talking with the owner, I realized that his strategy was a viable way to begin wealth building. Here’s what I learned, my little brother was paying $30 dollars a day, but smaller rooms were $20 a night and offered bathroom and kitchen access with parking. The rooms were relatively small in size approximately 250sq; will go over the numbers to give you a better idea …

As you can see above the gross profit is not extremely high due to the area those particular properties are located in, but if you choose a city in a B or C class neighborhood your gross profit would be much higher.

Airbnb is one of the many ways you could start building cash flow as a mobile homeowner or investor. Also by incorporating the next strategy; ie living in the home while doing Airbnb gives you a major advantage.

2. What is House Hacking

House hacking is a common strategy amongst all real-estate building types. It involves renting out the available rooms in your home/mobile home/condo/townhome etc. People even go as far as to rent out living rooms and their garages to bring in extra income. But the money you make is in the savings of your active income from your job not the income from the property.

The property I visited where my little brother had 4 bedrooms and one of the 4 was owner-occupied. According to the graph above the gross profit is $384 which would cover your expenses, repairs, vacancy, etc. The caveat to the scenario is that you would be living next to the beach RENT FREE.

This scenario is different because the owner was living on one of the top beaches in California. But again choosing a different city in a B to C Class market would offer a much greater ROI and would be a much lower barrier to entry even for California standards. According to United States Census Bureau, the average cost of a mobile/trailer home is $60,000.

The price may vary state by state and change slightly based on personal preferences like size, bedrooms, bath etc.

If you live in California along with other large metropolitan cities you’ve probably noticed the price of rent soaring. The average rent in Los Angeles has now reached an all-time high of:

Average Rent in Los Angeles Compared To Other Cities

Now imagine owning a mobile home in Los Angeles renting the rooms and breaking even every month. That’s a monthly savings of $2368 and a yearly savings of $28,416 which can foot the downpayment on your next deal.

Overall house hacking is a powerful strategy in any part of your real estate journey, it was a method I used when starting out. First, with a two-bedroom townhome, we shared the rent amongst each other. The second venture was renting out a room to my best friend when I purchased a duplex. Long story short I used the house hacking strategy for 11 years, allowing me to purchase investment properties with the money I saved from not having to pay a mortgage.

3. Renting Out Space on Your Land

According to New York Times magazine, 1 out of every 10 Americans rents an offsite storage unit. What does this mean for investors? Segments like storage units, outdoor and indoor storage facilities, and large lots designated for storage are becoming common.

Storage property lots segment in the market can be easily tapped into when you own a property with a large lot of land and living quarters like a mobile home or a trailer.

My father used to rent a 10 x10 space for his trailer from a person who owned about an acre of property in San Bernardino County. The price he charged was only $50 dollars a month, which isn’t bad considering the national average of $97.59 according to squarefoot.com.

Average Storage prices by unit size

• Unit size Average self storage prizes
• 5×5 $44.23
• 10×10 $94.28
• 5×10 $61.92
• 10×15 $124.24
• 10×20 $137.14
• 10×30 $183.73

The person my father was renting a space from had 10 vehicles on his property ranging from boats to trailers and the prices vary by size. The minimum price was $50 and could increase from there, his average income was $1,200. The property wasn’t pretty; dirt lot with 10 vehicles organized in a structured manner, and the mobile home was set up on the back rear corner of the property.

This method can generate steady cash flow with minimal to no maintenance. However, most mobile home parks rent the land to their tenants. So in order to implement this strategy, you would have to own the land because homeowners associations may not allow the storage of vehicles.

4. Renting Out My Mobile Home

In the similar fashion that you would rent a home and make a profit, the same can be done with a mobile home. There are a few differences that you would have to be knowledgeable of before making the decision to rent your home. If you are all ready to commit to renting out a mobile and have not purchased the property yet you’ll be at a slight advantage.

All mobile home parks have rules and guidelines that the owners must abide by, and understanding the rules can make or break your investment. For example, some parks don’t sell to outside investors, and some parks don’t allow property owners to rent their homes. If you’re just starting out then you can set the stage, shop around, and find which park rules best fits your needs. If you’re ready and you currently own your mobile home, speak with your park rep to find out what the guidelines are for renting your home.

Pros of Renting Mobile Homes as an Investment

1. Low barrier to entry

Mobile homes aren’t built on the actual land where they sit, there built in a factory and shipped to the desired location. The way there designed allows them to be manufactured and sold at a much lower price than homes. According to Zillow the average home in the U.S is $281,370 whereas the average price for a mobile home is $60,000. This makes it much easier to get started in real estate from a price point perspective.

2. Higher return on investment

A lot of factors go into the ROI of a property such as location, rent amount, mortgage cost, etc. But because of the low cost to entry-initial investment; and the high rent values mobile homes tend to bring in a higher return on investment. For instance, if you purchase a home for $5,000 and net just $250 a month your return on investment is 60% return.

3. Property is easily movable

Let’s say your mobile home park manager began raising the lot rent at 10% a year and stops paying the water and sewage for the tenants. This would cut into your overall profit, and as a mobile homeowner, you have the right to move your home to a park that best fits your needs.

Townhomes and condos typically have HOA fees, and the amount you pay never goes down. As a homeowner, if you disagree with the way the facility is being operated; there is no way to up and move the home to another property. Although pricey upwards of $4,000, you have an advantage when it comes to choosing a mobile home park that goes in alignment with your investment goals.

Cons of Renting Mobile Homes as an Investment

1. Property doesn’t appreciate

Unlike a home that appreciates 3% to 5% year over year, mobile homes have the opposite effect of decreasing 3% to 5% every year. The actual home is considered personal property similar to that of the car in which depreciates as soon as you drive off of the lot. The main strategy you must remember when it comes to renting mobile homes is it’s all about the cash flow and not appreciation.

2. Lot rent price increases

The majority of mobile homeowners do not own the land where their property sits. The properties are owned by companies all around the U.S, and like you, their main objective is appreciation and cash flow. This comes as an added cost to the property owners by increasing the lot rent yearly.

3. Difficulty financing

Mobile homes mortgages are seen as a risky loan in the eyes of a banker due to the lack of appreciation. This makes it harder to acquire a home through traditional financing. But there are plenty of banks that specialize in mobile home lending; with a little bit of research, it’s not difficult to find a lender that can help you purchase a home.

To reach the $1,000 mark with this particular investment strategy, you would have to have multiple homes in your portfolio.

5. What is Mobile Home Syndication

What is Syndication

Syndication is a fancy term used for pooling capital together by multiple investors to purchase an investment. This technique is used for a variety of different investments such as apartments, homes, mobile home parks, shopping centers, and so on.

The investors provide the capital and the syndicator(manager of the deal) operates the property and provides a return on your investment based on their projections.

How commercial property is valued

Commercial property is a unique asset, because unlike the single-family homes in which their value is based upon the prices of the homes around them. Commercial property is treated as a business and the value is created by the net operating income; in other words how much money the asset brings in every month.

Mobile home syndication

So what is mobile home syndication? It’s the pooling of the capital together to purchase the land that the mobile homes sit upon. The mobile homeowners pay you the mobile home park landowner.

As soon as the property is acquired, syndicators have a business plan in place that allows them to generate a projected amount of profit on the deal in a certain time horizon. The managers of the property find creative ways to increase its value such as increasing the lot rent, and passing on the utilities to the tenants; thus increasing your overall investment.

As an investor in todays market you could easily make from 8% to 10% on your initial investment.

Final Thoughts

All investment classes have their risk, and your return is based on the level of risk you assume.
If there one thing of importance that I want you to take from this article, is there is no one way to invest in real estate. Being creative with your strategy can take you a long way.

The mobile home investing strategies mentioned above are only scratching the surface. Mobile homes are a great way to break into the market with a minimal initial investment. Whether you buy and hold, purchase a mobile home park, or take the Airbnb route.

Educating yourself about the market will prevent any major mistakes down the road. 
Either way, start researching your niche, choose a plan that works for you, and get started. Believe me, you’ll wish you would have started earlier.