Investing goals aren’t limited to generating profits. It seems counterintuitive, but ever-increasing returns aren’t the only reason people purchase investments. Making a social impact can be on investors’ radars, including expanding the amount of affordable housing. Improving a community’s quality of life and bringing in much-needed resources are other ethically oriented goals.
While you might not think mobile home parks present opportunities to make a difference, you could be pleasantly surprised. Maintaining housing affordability, improving tenants’ quality of life, and fostering community cohesion can become fulfilling aspects of investing in mobile home parks. One or more of these aspects could even represent your primary investment strategy. Social impact first, acceptable return second.
Ethical investing isn’t a simple platitude to some. It’s a way to combine resources, expertise, and a desire to better the lives of others. Let’s explore in detail how mobile home parks can be a virtuous investment for those seeking more than just profitability.
Redevelopment of Neglected Properties
No matter what type of property you’re dealing with, it’s usually easy to spot those in need of a little TLC. Peeling paint, overgrown weeds in the yard, and dilapidated structures are blatant eyesores. Neglect can happen to single-family homes and apartment complexes just as it can to mobile home parks. Yet, some signs of neglect aren’t isolated to individual homes.
A property’s shared facilities, such as playgrounds and roads, could also be in disrepair. Outdoor lighting may no longer work, raising safety concerns at night. Roads full of potholes make it challenging to travel to and from the community, resulting in more vehicle repairs. Potential injuries to those riding bikes and walking also decrease residents’ quality of life.
Redeveloping mobile home parks that need improvements is a way to increase the quality of tenants’ living conditions. You can strike a balance between affordable rent and attractive amenities. By making a park more appealing and safer for residents, you’re also increasing the desirability of living there. The surrounding city is less likely to want to rezone the property for another purpose, decreasing the number of affordable housing options.
Regarding the development of mobile home parks, Lifestyle Investing expert Justin Donald notes, “You’ve got 44,000 mobile home parks in the United States, about 100 get redeveloped every year. Way less gets developed because cities don’t want it, right? So, it’s hard to get the zoning. So, it’s hard, it’s expensive, and it’s very rare. In some pockets and instances, you can do it with favorable government legislation around zoning.”
Preservation of Affordable Housing
In the previous five years, home values have gone up between 8% and 9% each year. While these percentages are averages, the figures also point toward rapid increases. The stats are above normal benchmarks when you look at historical jumps in value.
For the everyday household, larger-than-normal increases make finding affordable housing a challenge. If someone wants to downsize, it may be impractical. There might not be enough equity to avoid taking out a new mortgage on a smaller property. And a household could be faced with higher interest rates to boot, putting the transition out of financial reach.
Compared to conventional options, mobile homes tend to offer significant upfront and long-term savings. A mobile home will cost less to buy. These structures are also cheaper to maintain. Utilities and maintenance can be less than in a single-family home or condo.
Investing in mobile home parks preserves affordable housing options for a city’s residents. Those starting or winding down their careers don’t have to look for homes outside city limits. Although home prices are typically lower in rural areas, longer commutes add to monthly expenses and stress levels. When people have options in their own cities, they have more time to enjoy their personal lives.
In addition, access to affordable housing can be a top concern for retirees, lower-income households, and people with disabilities. Preserving less expensive homes means these groups aren’t forced out of communities or left so financially strained they can’t pay for much else. Socioeconomic inequality only increases when access to the basics becomes restricted or out of reach. Keeping housing prices reasonable is something mobile home park investors can achieve.
Building Community Resilience
Communities tend to decline when there’s a lack of economic opportunities. When a major employer leaves town, the repercussions might be felt for decades. A domino effect can spread to other businesses, particularly smaller ones, tax revenue declines, decreasing the funds available for public services such as recreational facilities.
A community also declines when connections suffer, decreasing the sense of shared interest in a place’s upkeep. But when there’s enough investment, people have the resources they need to build resilience. There will always be fluctuations in economic conditions as industries shift. A city’s makeup can also change, from the dominant skillsets of its residents to its growth needs.
Building resiliency to market forces is crucial for any community’s survival. When residents no longer see a city as a viable place to call home, they also leave. Investments in properties, including mobile home parks, support individual and collective needs.
As an investor, you can choose to operate under a rent-to-own business model. You purchase the homes and the land on which the structures sit. However, you provide residents with the option to build equity.
You can also arrange flexible payment options and rental agreements if it makes fiscal sense. Fostering communication and relationships between residents is another way to build resilience. When people talk to each other, they can come up with ingenious solutions to shared concerns, including rising living costs.
Ethical Investing and Mobile Home Parks
Investment strategies often come down to will and intent. You can focus on short-term profitability over other potential objectives. Even long-term returns at a specific threshold may be your sole aim. Yet, not all investors want to favor profits at all costs.
They want to make a difference, too. Ethical investing helps achieve this goal by improving the lives of those who can benefit from an investor’s activities. Mobile home parks can be opportunities to boost the quality of shared resources, maintain affordable housing, and build community resilience. The returns on your investment gains will be more than individual or financial. They can be collective, socially impactful, and beneficial for years to come.
