---

Guest post by: Dave Reynolds Become an Author

Tweet

---

---

One of the biggest news stories emerging from the embattled mobile home manufacturing and sales side of the industry is the current and proposed litigation concerning formaldehyde contamination in mobile homes. As you may or may not be aware, formaldehyde is used in the creation of the products that are used to build a mobile home, such as wood products, I believe. Recently, there have been some studies that may suggest the level of formaldehyde in some homes may exceed the safe level. But my question is what the worst-case scenario might be from litigation regarding formaldehyde, as it affects mobile home park ownership and operations.

The worst case scenario, of course, would be a virtual standstill of mobile home construction and sales at dealerships while the problem is studied and addressed. If litigation is successful, it might lead to judgments that could theoretically damage the ability of manufacturers to build new homes. And it may also cause a huge backlash against the product due to safety and health concerns by potential buyers. So what would the worst-case scenario do to your mobile home park? Well, it looks to me like it might have favorable near term consequences for park ownership. And I'm not sure the long term impact is that large, either.

If the formaldehyde issue causes many of the victims of Hurricane Katrina and other natural disasters, who live in FEMA provided mobile homes, to be forced to move to alternative housing, clearly that bodes well for vacant units inside mobile homes parks--both for sale and for rent. It also will fill up a substantial amount of apartment vacancies, thereby leading to supply and demand inspired higher rents, which again makes homes and lot rents seem more affordable (and lead to more lot rent increases). It will also potentially cripple the land/home business, which relies on new homes and has been a thorn in the side of community ownership for years now. Reducing the supply of land/home communities can only help the mobile home park owner.

In most of the studies that I have read, it appears that formaldehyde is reduced over time, which means that older mobile homes will be more attractive until the issue is resolved. Again, this will benefit existing park owners who have older inventory. For the neat term, the competition from new homes may be abated, and the age of a home will be looked upon as a plus and not a minus.

As for the long-term effects, the sales of mobile homes have been horrible for almost seven years. Barely over 100,000 units per year have been produced (about 25% of 1999 levels), and a large number of those are multi-section which normally don't end up in mobile home parks anyway. These days, it is a rare call indeed when someone inquires as to a vacant lot for a new home. I'm not sure that a complete halt to the construction of homes would even be felt in the park business; it already seems like that now!

The formaldehyde issue is a terrible problem for both the customers involved and the manufacturers and dealers. But before you throw the baby out with the bathwater, I think it is worth taking a minute to examine the real impact on the mobile home park business model. It appears that this problem may just be isolated to the manufacturing and sales side of the industry. And the terrible decline in sales over the past seven years may have been a blessing, preparing us for a potential even greater and overnight slow down in sales of new homes.

Related Articles

  Mobile Home Tenants - Fixing Mobile Home Park Vacancy Problems
  How to Finance a Mobile Home Park: You Can Still Get Zero Down Financing
  Fixing Mobile Home Park Vacancy Problems
  Why Good Looking Mobile Home Parks Have Ugly Returns
  How Mobile Home Parks Make More Money Than Single-Family Home Investing
  How to Make Money in the Mobile Home Park Business
  How to Retire on Just One Mobile Home Park
  Mobile Home Parks: How To Dispose of Ancillary Assets
  How to Rent a Mobile Home Park in a Tough Economy
  How to Evaluate a Mobile Home Park
  How to Really Make Money with Mobile Home Parks
  Mobile Home Parks: The Perfect Storm is Building for the Best Deals in Decades
  Why Buy a Mobile Home Park as Compared to Apartments and Other Types of Commercial and Investment Real Estate?
  Mobile Home Park Investments - How To Make 10% To 20% On Your Money
  Don't Hold Your Mobile Home Park Residents to a Unreasonable Standards
  Mobile Home Parks - How to Properly Enforce the Rules
  Winning Outside the Courtroom
  How to Properly Evaluate Mobile Home Park Investments
  Finding and Evaluating Mobile Home Park Investments
  Mobile Home Parks - How to take Advantage of the Greatest Buying Opportunity in Decades

Referred by: http://www.mrlaundromat.com/

Related Forum Posts

A Mobile App Or A Mobile Website?
Re: The Mobile Marketing
Home-based Business
Re: Mobile Marketing
Re: How do you budget your life?

Share this article. Fund someone's dream.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Exploring NLP-related topics on TV:

How to Write Your Compelling Vision Statement

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.