Salient to Investors:
Investors are getting rich renting the concrete pads and surrounding dirt on which residents park their homes. JLT & Associates say rents nationwide average $390 per pad per month.
Many US counties have banned or discouraged construction of new trailer parks because the inhabitants are poor, pay little in taxes and drain resources. Demand is higher than ever because so many people never got back on their feet after the recession and more of the US middle class is sliding into poverty.
Warren Buffett purchased Clayton Homes, the largest manufacturer of mobile homes, over a decade ago. Private-equity firms are starting to invest.
6 percent of Americans lived in mobile homes in 2012. Once a tenant trucks a home to a site, he is unlikely to leave because it costs at least $5,000 to move a home.
The way to instant profits is to find a distressed park, where rent checks are late, water meters don’t exist and trailers date from the 1980s or 1990s, and buy it cheaply and turn it around.
Read the full article at http://www.bloomberg.com/news/2014-04-10/trailer-parks-lure-investors-pursuing-double-wide-returns.html
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