Starting a mobile home park can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful mobile home park.
Importantly, a critical step in starting a mobile home park is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here.
14 Steps To Start a Mobile Home Park:
- Choose the Name for Your Mobile Home Park
- Develop Your Mobile Home Park Business Plan
- Choose the Legal Structure for Your Mobile Home Park
- Secure Startup Funding for Your Mobile Home Park (If Needed)
- Secure a Location for Your Business
- Register Your Mobile Home Park with the IRS
- Open a Business Bank Account
- Get a Business Credit Card
- Get the Required Business Licenses and Permits
- Get Business Insurance for Your Mobile Home Park
- Buy or Lease the Right Mobile Home Park Equipment
- Develop Your Mobile Home Park Marketing Materials
- Purchase and Setup the Software Needed to Run Your Mobile Home Park
- Open for Business
1. Choose the Name for Your Mobile Home Park
The first step to starting a mobile home park is to choose your business’ name.
This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your own mobile home park:
- Make sure the name is available. Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
- Keep it simple. The best names are usually ones that are easy to remember, pronounce and spell.
- Think about marketing. Come up with a name that reflects the desired brand and/or focus of your mobile home park.
2. Develop Your Mobile Home Park Business Plan
One of the most important steps in starting a mobile home park is to develop your business plan. The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.
Your business plan should include the following sections:
- Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your mobile home park.
- Company Overview – this section tells the reader about the history of your mobile home park and what type of mobile home park you operate. For example, are you a private park, cooperative park, public park, manufactured home community, RV park, campground, or a mobile home resort?
- Industry Analysis – here you will document key information about the mobile home park industry. Conduct market research and document how big the industry is and what trends are affecting it.
- Customer Analysis – in this section, you will document who your ideal or target customers are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing products or services like the ones you will offer?
- Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
- Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
- Product: Determine and document what products/services you will offer
- Prices: Document the prices of your products/services
- Place: Where will your business be located and how will that location help you increase sales?
- Promotions: What promotional methods will you use to attract customers to your mobile home park? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
- Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
- Management Team – this section details the background of your company’s management team.
- Financial Plan – finally, the financial plan answers questions including the following:
- What startup costs will you incur?
- How will your mobile home park make money?
- What are your projected sales and expenses for the next five years?
- Do you need to raise funding to launch your business?
3. Choose the Legal Structure for Your Mobile Home Park
Next you need to choose a legal structure for your mobile home park and register it and your business name with the Secretary of State in each state where you operate your business.
Below are the five most common legal structures:
1) Sole proprietorship
A sole proprietorship is a business entity in which the mobile home park owner and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.
A partnership is a legal structure that is popular among small businesses. It is an agreement between two or more people who want to start a mobile home park together. The partners share in the profits and losses of the business.
The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.
3) Limited Liability Company (LLC)
A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a mobile home park include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.
4) C Corporation
A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a mobile home park is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.
5) S Corporation
An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.
Once you register your mobile home park, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.
4. Secure Startup Funding for Your Mobile Home Park (If Needed)
In developing your new mobile home park business plan, you might have determined that you need to raise funding to launch your business.
If so, the main sources of funding for a mobile home park to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a mobile home park that they believe has high potential for growth.
5. Secure a Location for Your Business
The first step in finding a location for your mobile home park is to identify areas where there is a demand for this type of housing. You can do this by looking at population data and analyzing the demographics of potential residents. Another important factor to consider is the availability of land. You’ll want to find an open space that can accommodate your park.
6. Register Your Mobile Home Park with the IRS
Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).
Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.
Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.
7. Open a Business Bank Account
It is important to establish a bank account in your mobile home park’s name. This process is fairly simple and involves the following steps:
- Identify and contact the bank you want to use
- Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
- Complete the bank’s application form and provide all relevant information
- Meet with a banker to discuss your business needs and establish a relationship with them
8. Get a Business Credit Card
You should get a business credit card for your mobile home park to help you separate personal and business expenses.
You can either apply for a business credit card through your bank or apply for one through a credit card company.
When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.
Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.
9. Get the Required Business Licenses and Permits
Starting a mobile home park may require a variety of licenses and permits. The most important license you will need is a business license from your local government. You may also need a zoning permit, special use permit, and a manufactured home installation permit.
10. Get Business Insurance for Your Mobile Home Park
The type of insurance you need to operate a mobile home park will vary depending on the scope of your operation.
Some business insurance policies you should consider for your mobile home park include:
- General liability insurance: This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
- Workers’ compensation insurance: If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
- Commercial property insurance: This covers damage to your property caused by fire, theft, or vandalism.
- Business interruption insurance: This covers lost income and expenses if your business is forced to close due to a covered event.
- Professional liability insurance: This protects your business against claims of professional negligence.
Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.
11. Buy or Lease the Right Mobile Home Park Equipment
A mobile home park investment is great, but it’s important to make sure you have the proper equipment to run the business. You’ll need a tractor for mowing and landscaping, as well as a dump truck for trash collection. You’ll also need a trailer to move mobile home units in and out of the park.
12. Develop Your Mobile Home Park Marketing Materials
Marketing materials will be required to attract and retain customers to your mobile home park.
The key marketing materials you will need are as follows:
- Logo: Spend some time developing a good logo for your mobile home park. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
- Website: Likewise, a professional mobile home park website provides potential customers with information about the products and/or services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you..
- Social Media Accounts: establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your mobile home park.
13. Purchase and Setup the Software Needed to Run Your Mobile Home Park
The most important software you need to run a mobile home park is a property management system. This system will keep track of all the residents in your park, as well as their payments and other information. You’ll also need accounting software to manage your finances, and a website to advertise your park and attract new residents.
14. Open for Business
You are now ready to open your mobile home park. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.
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How to Start a Mobile Home Park FAQs
No, it is not too hard to start a mobile home park because it has a relatively low barrier to entry. In most cases, all you need is some land and the ability to get zoning approval. This makes it a relatively straightforward option for starting a business. The most significant hurdle is the price for the land.
The best way to start a mobile home park with no experience is to do some research and get familiar with the industry. Start by reading books or articles about the subject, and then attend industry events or webinars to learn from experts. You can also network with other mobile home park owners and operators to get advice and tips.
The most profitable type of mobile home park is a one that is well-maintained and has a good reputation. The residents of the park are happy, and the park is clean and well-lit. It is also important to have a good location, with easy access to shopping, dining, and other amenities.
The cost of starting a mobile home park ranges depending on the size and location. Generally, you can expect to spend between $250,000 and $1,000,000 to get started. This includes the cost of purchasing land, developing the site, and marketing the park.
The ongoing expenses for a mobile home park can include things such as property taxes, insurance, and maintenance costs. Additionally, the park may have other regular expenses such as utilities, trash service, and security.
Mobile home parks can make money by renting out space to people who own mobile homes, or by renting out the mobile homes themselves. In addition, many mobile home parks have on-site amenities such as laundry facilities, swimming pools, and clubhouses that residents can use for a small fee. Some parks also charge for cable TV and internet service.
Yes, new mobile home parks are profitable because they offer a unique and valuable service. They provide affordable housing for people who cannot afford traditional housing, such as apartments or single-family homes. In addition, mobile home parks are typically located in desirable areas, such as near cities or in scenic areas, which increases their value. Finally, mobile home park investments are safe because they are consistently in demand.
There are a number of reasons an existing mobile home park can fail, but some of the most common are lack of proper management, bad location, and changing demographics. A park that is not well-managed will have poor upkeep, which can lead to resident dissatisfaction and subsequent vacancy. If a park is located in an undesirable area or close to a competing amenity, it can also lead to failure. Finally, if the demographics in the surrounding area change and the park becomes less attractive to potential residents, it may struggle to stay afloat.