How to Start a Trailer Park and Create Passive Income

With housing costs on the rise, it’s no surprise that more people are leaning into a minimalist lifestyle. If you’ve ever thought about investing in land for housing, starting a mobile home park could be one of the smartest moves—and it’s more accessible than you might think.

Owning a mobile home park provides steady monthly income through lot rents while allowing you to retain ownership of your land. It’s a business that can build lasting income for you and even future generations.

If you’re exploring how to start a mobile home park, keep reading. In this guide, we’ll break down what it takes to build one from the ground up, including the potential challenges and costs involved, and why this venture could create a solid stream of income.

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What Is a Mobile Home Park?

According to the Mobile Home Park Home Owners Allegiance, there are over 45,600 mobile home parks across the U.S. The Financial Times reports that approximately 22 million Americans are now living in mobile homes—a trend driven by rising housing prices.

For the average wage earner, affording a median-priced traditional home is becoming out of reach. Many renters now spend nearly a third of their income on housing, leaving limited financial options.

Affordable Housing

Given these realities, it’s no surprise that more Americans are choosing mobile home living as an affordable alternative. Mobile homeowners typically rent the land where their homes are located, with lot rents being significantly lower than renting an apartment or a single-family home.

A mobile home park is a community where mobile homes are set up. While most mobile home parks are privately owned—either by individual owners or corporations—some are Resident-Owned Mobile Home Parks (ROPs). In these resident-owned parks, residents purchase shares in the park itself rather than the land beneath their mobile homes.

Mobile home parks can operate on either leased land or owned land. In a leased land park, the property is privately owned, and residents pay monthly lot fees. In an owned land park, homeowners have a stake in the land, covering only small fees for utilities, maintenance, and upkeep.

12 Steps to Start a Mobile Home Park

1. Choose a Name for Your Mobile Home Park

Selecting a business name for your mobile home park might seem simple, but it’s a critical step for establishing your brand and avoiding potential trademark issues down the road. Make sure to thoroughly research local jurisdiction and national databases to ensure the name is available and original.

Check if the domain name is also available, as an online presence is essential in today’s market. A short, memorable name is often the best option, especially for attracting real estate investors looking for good deals in the mobile home park investment space.

2. Develop a Mobile Home Park Business Plan

Creating a detailed mobile home park business plan is essential. This plan should reflect your business strategy and understanding of affordable housing.

Key sections to include are:

• Location and Market Analysis: Conduct due diligence to assess the demand in the area.
• Executive Summary: Capture the main points of your business plan, especially for potential investors.
• Company Overview: Describe the type of park you’re developing—whether a traditional mobile home park, RV park, or special occupancy park.
• Industry Analysis: Evaluate the market, including demand for cash flow properties and competition from apartment buildings and commercial real estate.
• Marketing Strategy: Outline how you’ll attract mobile home park residents using lot rents as a primary revenue source.
• Operations and Management: Detail daily operations, focusing on low maintenance practices and how you’ll handle maintenance costs.
• Financial Plan: Describe your capital needs, financing options (such as seller financing, bank loans, or hard money loans), and cash flow projections.

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3. Establish the Legal Structure of Your Mobile Home Park

Deciding on a legal structure is an important step, which includes officially registering your park’s name with the Secretary of State in the location where the park will operate. The main options for legal structures include:

Business Structure	Description
Sole Proprietorship	Ideal if you’re the only owner, with simple setup and full control, but no personal liability protection.
Partnership	Suitable for businesses with one or more partners, where responsibilities and profits are shared.
Limited Liability Company (LLC)	A popular choice among small business owners. Limits personal liability, so your personal assets remain protected if the business faces financial trouble.
S Corporation (S Corp)	Similar to an LLC but with a unique tax structure. Allows owners to pass business income through personal tax returns, potentially reducing double taxation.

4. Secure Funding for Your Mobile Home Park

If you have enough capital, self-funding might be the best way to proceed. Otherwise, consider financing options such as bank loans, angel investors, or hard money loans.

In some cases, you may attract potential investors by offering a master lease agreement or a share in ownership.

5. Register Your Mobile Home Park with the IRS

If you plan to hire employees, you will need an Employer Identification Number (EIN) from the IRS.

However, if you’re managing the park as a sole proprietor without employees, you can use your social security number for tax purposes.

6. Set Up a Business Bank Account

To keep mobile home park revenue organized, establish a separate business bank account.

This simplifies financial tracking, especially when working with local lenders or handling operational costs.

7. Get a Business Credit Card and Business Cards

A business credit card for the park is useful for tracking expenses. 

Business cards still provide value despite the digital era, especially for investor relations and connecting with third-party service providers or property managers.

8. Obtain Necessary Permits and Licenses

Your park will need specific permits and licenses, which vary based on local jurisdiction. Contact your local government for details.

Typical requirements may include zoning permits, manufactured housing space permits, and special use permits.

9. Secure Business Insurance for Your Mobile Home Park

Obtaining the right business insurance safeguards your investment. Common policies include:

• General Liability Insurance – covers incidents within the park.
• Workers’ Compensation Insurance – protects both you and any employees.
• Commercial Property Insurance – provides coverage for damages from natural disasters, theft, or vandalism.
• Business Interruption Insurance – helps recover lost income from unexpected disruptions.
• Professional Liability Insurance – protects against claims of negligence.

10. Purchase Equipment for Park Maintenance

Proper equipment is necessary for low-maintenance operations. Essential tools include:

• Lawnmowers or tractors for landscaping.
• Chainsaws for trimming trees.
• Dump trucks or garbage trucks for waste management.
• Pressure washers for exterior cleaning.
• Golf carts for efficient transport around the park.

11. Create Your Marketing Materials

Effective marketing is key to attracting mobile home park residents. Essential marketing materials include:

• Logo: A distinctive logo enhances branding and sets you apart.
• Website: Include essential information on lot rents, park amenities, and contact details. A professional site with drone photos can attract more interest.
• Social Media Accounts: Platforms like Facebook, Instagram, YouTube, and LinkedIn are invaluable for promotion. YouTube videos showcasing the park layout and community amenities can appeal to potential residents.

12. Launch Your Mobile Home Park Business

Once you’ve completed these steps, you’re ready to open the park. In the early months, emphasize social media marketing to generate buzz and attract your initial mobile home park residents.

Key Considerations When Starting a Mobile Home Park

While mobile home park investing can be highly profitable, it does come with its own set of risks. Mobile home parks are often viewed as somewhat riskier compared to traditional real estate investments.

Here are a few important factors to keep in mind when planning your mobile home park business.

#1. Funding Challenges

Securing traditional funding for a mobile home park can be challenging. Unlike apartment buildings or other commercial real estate, mobile home parks often face more scrutiny from local lenders.

While seller financing, investment funds, and hard money loans are viable alternatives, they come with added risks. It’s crucial to thoroughly evaluate your financing options and proceed with caution to ensure a sustainable business.

#2. The Scope of Work Involved

Developing land into a functional mobile home park requires extensive effort and planning, particularly if you’re working with inexperienced contractors.

Operating a park is manageable, but building one from the ground up is a more complex endeavor. Detailed planning, including conducting due diligence, is essential, as is including every aspect in your business plan.

Final Thoughts

Building a mobile home park can be relatively accessible, thanks to its lower barrier to entry compared to projects like a full real estate subdivision. All that’s needed is land, zoning approval, and skilled landscape professionals. While the process is straightforward, the biggest obstacles are often the cost of land and careful planning.

You don’t need to be a real estate expert to succeed in this industry. With solid market research, thorough planning, and an understanding of the local housing demand, you can start a mobile home park even without prior experience, provided you have the financial resources to support it.

FAQs

How much does it cost to start a trailer park near me?

The cost to start a trailer park varies significantly based on location, land price, and infrastructure needs. Generally, initial investments can range from $100,000 to over $1 million for land acquisition, permits, and basic utilities setup. Additional costs include zoning approval, construction of roads and amenities, and ongoing maintenance. Conducting a thorough market analysis and budgeting for each step will help you accurately estimate your costs based on your specific area.

What are the risks of investing in mobile home parks?

While mobile home park investments can provide strong cash flow and returns, they also carry risks. Key risks include funding challenges, as traditional banks may be hesitant to finance mobile home parks, and operational challenges, such as handling tenant turnover, maintenance, and ensuring compliance with local regulations. Additionally, mobile home parks are subject to fluctuations in market demand, which can impact lot rents and occupancy rates. Proper due diligence and a solid business plan can help manage these risks effectively.

Who owns the most mobile home parks?

Large companies and investment groups like Equity LifeStyle Properties, Sun Communities, and RHP Properties are among the biggest owners of mobile home parks in the U.S. These firms have capitalized on the high demand for affordable housing by purchasing and operating large portfolios of parks across the country. This trend reflects the increasing interest of real estate investors in mobile home parks as a stable commercial real estate investment.

Is owning an RV park profitable?

Yes, owning an RV park can be profitable, especially in high-demand areas with a steady stream of tourists or travelers. RV parks generate revenue primarily through space rents and can often charge premium rates for short-term stays. The low maintenance costs and flexibility in lot pricing make RV parks an attractive investment option. However, profitability depends on factors like location, amenities, and seasonality.

Can you make money on a mobile home?

Yes, you can make money on a mobile home in several ways. If you own a mobile home park, lot rents from tenants can provide steady cash flow. Alternatively, you could purchase individual mobile homes and lease them out or sell them for a profit. While mobile homes generally depreciate, the land they occupy tends to appreciate, especially if there is high demand for affordable housing in the area. Managing costs and maintaining occupancy are essential to maximizing returns.

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