The Key Benefits of Investing in Manufactured Home Communities

June 9, 2021 7:00 am Published by Terry Paranych Real Estate Group

Manufactured home communities have become increasingly popular among Edmonton real estate investors over the last several years, and it’s not hard to see why! Aside from high returns, reduced maintenance and general affordability, these units are consistently in high demand among Edmonton home buyers.

Whether you’re an experienced real estate investor wanting to diversify your portfolio or an aspiring beginner looking for a low-risk way to get your foot in the door, here are the top reasons to consider investing in a manufactured home community.

Types of Manufactured Home Ownership

Before diving in, it’s important to note there are two types of manufactured home ownership through which an investor can benefit:

Home and Lot Ownership – In this scenario, the investor owns both the land as well as the home. As such, the tenant will pay rent on the home and the land, much like renting a condo.

Lot Ownership – This refers to the ownership of the lot/land on which the home is built; the tenant owns their own home but pays the investor rent for the land. Some investors may even choose to purchase an entire community, leasing each unit of land to residents that rent or own.

While both forms of ownership offer unique advantages to the investor, the following benefits refer to lot ownership.

Benefits of Investing in Manufactured Home Communities

1. A Smaller Investment Upfront

By buying the land and not the home (which will make your investment significantly more expensive), you’ll be able to acquire more for less. Simply put, you’ll be in a better position to invest in multiple land units for the same (or less) money than any other form of real estate investment. This also means you may require less capital upfront while potentially minimizing your risk (more units for less money = less risk).

2. Reduced Tenant Turnover

Another key benefit of investing in a manufactured home communities is reduced turnover. Unlike the average tenant who need only to pack up their possessions when their lease has expired, many manufactured tenants own their own homes – making the option to simply “pick up and leave” much more difficult (in fact, this can cost thousands of dollars). This dramatically reduces time and money associated with lost income during vacancies, attracting new tenants, cleaning the vacated unit, etc.

3. The Potential for Multiple Income Streams

Manufactured home communities offer one the lowest costs per unit compared to any other real estate asset class. As mentioned above, this enables investors to potentially purchase several units for less than a single-family or multi-family property and benefit from multiple income streams.

4. Lower Maintenance Costs

Since many manufactured homeowners own their own units, you won’t have to worry about additional costs associated with maintenance and repairs. While you will be responsible for expenses related to the community (i.e. waste disposal, community amenities, upkeep of the land, etc.), this is considerably more affordable than a single or multi-family property, which can add up to thousands a year.

5. Your Choice of Communities

The capital region is home to several diverse and attractive manufactured home communities. In addition to the City of Edmonton proper, investors have their choice of affordable opportunities in highly desirable surrounding areas such as Stony Plain, Spruce Grove, Leduc and more. Developed with convenience in mind, most of these neighbourhoods sit within close proximity to schools, shops and services, which also helps to attract tenants and reduce turnover.

6. Always in Demand

Affordable single-family homes are always in demand in Edmonton. Since manufactured homes allow Edmonton buyers to own their own home at a fraction of the cost (and maintenance) of a traditional site-built home, they will continue to fill this need. They’re also highly versatile, allowing them to cater to a broad range of home buyers and lifestyles, including first-time buyers, growing families, downsizers and everything in between.

Check out our previous post: The Benefits of Owning a Manufactured Home

7. Less Competition

While Edmonton’s manufactured home communities remain in constant demand, their development isn’t as common. This prevents the market from becoming oversaturated. Manufactured home communities also tend to be overlooked by those focused solely on traditional forms of real estate – making them the perfect investment for those in search of a good deal without the added competition.

Should You Invest in a Manufactured Home Community?

While manufactured home communities make an excellent investment, they do need to fit into your overall investment goals. In addition to your mortgage professional, we recommend partnering with an Edmonton REALTOR® with years of real estate investment experience.

Not only will they help you determine if manufactured home communities are right for you, but they’ll also help you:

Zero-in on the right property for your needs
Understand the real estate investment process from start to finish (including financing, accurately calculating ROI, tax implications and more)
Navigate the Edmonton real estate market, current conditions and trends
Negotiate with landowners/sellers and their agents to secure the best deal possible
Connect with other real estate investment professionals integral to your success (mortgage brokers, lenders, real estate lawyers, accountants, other investors, etc.)
Uncover the best properties available on the market via private sellers, wholesalers and individual owners
And more

For more information on manufactured homes and manufactured home community investment opportunities in Edmonton and area, we invite you to see our latest single-family home listings. Or, feel free to reach out to us to learn more about affordable, low-maintenance manufactured homes in your desired area.

And, don’t forget to download your free copy of our free real estate investment guide, How to Create Amazing Wealth: A Beginner’s Guide to Investing in Real Estate. Through this guide, you’ll learn everything you need to know about

The Benefits of Investing in Real Estate
Real Estate Investing Basics
Finding the Right Investment Opportunity
Investing in the Right Community
How to Organize Your Finances
How to Focus on Multiple Income Streams
And much more!

Related:

Photo credits: featured image, text images

Tags: investing

Categorised in: Home Styles, Real Estate Investing

This post was written by Terry Paranych Real Estate Group