Reader Question:
How will deflation impact owners of mobile home parks and low-end apartments? Prices are VERY high for MHPs right now. Buyers are jacking up rents, while tenants can’t get full-time jobs. Tons of 1031 Exchange money chasing too few deals, too. Seems like a good time to SELL my parks and get OUT to me, and possibly buy back in later? — Robert T.

How will deflation impact the owners of mobile home parks and low-end apartments? The real estate investor question of the week blog by Richard 'Monty' MontgomeryMonty’s Answer: Hello, Robert, and thanks for your question. It is common in a variety of businesses, including real estate, that sellers at high prices buy the property back at a later date at a deep discount.

Having said that, whether or not it is a good idea for you is a question that cannot be answered without a lot more information.

Every investor’s situation is unique, and counsel will vary with the circumstances. Consider a discussion with your certified public accountant (CPA) or tax accountant to review all options before making a decision. Real estate tax law changes from time to time.

Every segment of real estate is cyclical, including mobile home parks.

Real estate investor question of the week on mobile home parks deflation and low-end apartmentsAs you stated, the growing demand in the segment is driving prices up. Do those buyers know something you do not know? I am not certain how you are using the term “deflation” as opposed to “inflation,” but is it possible this new rush of buyers into the market expects the same trend that you see, but has an opposite interpretation of the results?

One of the unique characters of many MHPs is that the “tenants” usually have more of an investment in the tenancy because they own the mobile home, some of which can be expensive. In an apartment building, they simply own furniture.

There will always be an active market for what you term “low-end housing.” Depending on whom you talk to, the size of the low-end community may be growing, which also creates demand.

I hope this information is helpful, Robert. Ask if there are other questions.


Richard Montgomery

PS from Monty:  “Mobile home parks can be quite lucrative, just like other forms of real estate investment, but are often overlooked. It is a very specialized market and many communities have a bias against the development of MHP’s. Warren Buffet doesn’t seem worried about it.

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  • Dear Monty

    Richard Montgomery gives no-nonsense real estate advice to readers’ most pressing questions. He is a real estate industry veteran who has championed industry reform for more than a quarter of a century. Send him questions at

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