There are 10,000 Baby Boomers retiring per day in the U.S. and a large percentage of those have a goal of downsizing as part of that new lifestyle adjustment. Given the fact that millions of these Baby Boomers already own RVs, the concept of simply selling their home and moving into an RV comes up fairly early in the conversation. But where can they place that RV to live in it full-time? Most RV parks don’t typically allow for full-time occupancy, instead having a stay limit of around 60 days or so. The only option for this housing concept are mobile home parks.
In this video we discuss the facts about putting RVs on lots in mobile home parks and what the good and bad elements are to the concept. If you are looking at filling vacant lots in your mobile home park, then the concept of utilizing RVs to fill those lots is a valuable consideration that can reduce vacancy with virtually no out-of-pocket cost.
Should You Put RV’s On Lots In Mobile Home Parks? - Transcript
Mobile home, mobile home, mobile home, RV. Is it okay to have an RV on a lot in a mainstream mobile home park? And the answer is definitely yes if the city allows it. Now, what happens when you have an RV? What are the complications of this fifth wheel existing on lots and traditionally have mobile homes on them, while the answer is really a banking question. Typically, people living in fifth wheels, we'll be here for the duration. It's an alternate form of living where people elect not to live in mobile homes due to the stigma, but instead recreational vehicle which have a very positive stigma. The end result is this person may have just as long a tendency as the person who is in a mobile home next door. The problem is the bank may look at this and say, now wait a minute though, they could hook up their car, pick up and pull the fifth wheel out of the drop of a hat. So how do we know their solidity in that income? Now, in a market such as this, as you can see, this property is basically full.
There's not really much of an issue, but if you had a property, a lot of vacancy, that might be the strata broke the camel's back. As far as the bank's opinion of your property and the cap rate and the value they would place on it. But by and large, as long as RVs don't exceed five percent of your total volume of customers in a mobile home park, banks are typically okay with that. Now, of course, it does depend on the lender, it depends on the quality of the RV, obviously an old down-scale travel trailer went score as well as this really nice fifth wheel with pop-outs. But nevertheless placing RVs on mobile home laws is becoming more common today. We'll probably be accelerating in the future because so many Americans already owned RVs and these bobbers downsize and sell their homes off, this is often where they will end up.