If you decide to build a standard trailer park in an urban or prime commercial area, then you must be ready to spend over $250,000.
Starting a trailer park might be a straightforward business, but you cannot rule out the fact that the business is capital-intensive. This is so because the amount required to lease or acquire land that is big enough to accommodate different types and sizes of trailers in a suitable location is massive.
Apart from the amount required to lease a piece of land big enough to accommodate your trailer park, you are expected to ensure that all the needed facilities and paperwork are in place. These are some of the factors that can influence the overall cost of starting a trailer park.
7 Factors That Influence the Cost of Opening a Trailer Park
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The Size of the Land and Infrastructure
One of the major factors that can greatly impact the cost of starting a trailer park, is the size of the land and infrastructure required for building the trailer park. On average, the size of a trailer park should be between 2,000 to 5,000 square feet.
Come to think of it, the bigger the land and infrastructure you settle for, the more you are expected to spend on lease or acquiring the land and infrastructure.
For example, it will cost you between $500 to $2,000 per acre per year to lease a piece of land in a rural community, while it will cost you between $2,000 to $10,000 per acre per year to lease a piece of land in a suburban area, and between $10,000 to $100,000 or more per acre per year to lease a piece of land in an urban or prime commercial area.
Please note that an average trailer park is expected to have space for 20 to 100 individual trailer lots, with each of the individual trailer lots accommodating a mobile home or trailer.
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Your Budget for Infrastructure and Utilities
Another major factor that will influence the overall cost of starting a trailer park business is the cost of infrastructure and utilities.
Trust me, the amount you are expected to spend on basic utilities such as electricity, water supply, drainage systems, lighting, furnishing, surveillance cameras, bathrooms, toilets, parking areas, and access roads is no doubt highly significant and can add up significantly to the overall cost of starting a trailer park.
Please note that you are going to spend money on installing or upgrading this infrastructure in your trailer park and this amount will depend on the scope and requirements of your specific location.
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The Cost of Acquiring Trailer Park Equipment and Supplies
If you are starting a trailer park, you will spend money to acquire the equipment and supplies needed to operate your trailer park.
In essence, you should make plans to spend on equipment and supplies such as utility hookups, electrical wiring and panels, water and sewer connections, roadway and paving materials, street lighting, trash receptacles, playground equipment, landscaping supplies, signage, security systems, office equipment, maintenance tools, recreational facilities, mailboxes, and laundry facilities.
No doubt, the budget for acquiring all the equipment and supplies will influence the overall cost of starting the trailer park.
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Your Choice of Design and Layout for the Trailer Park
Another major factor that can influence the cost of starting a trailer park is, of course, your choice of design and layout of your trailer park.
As expected, there are different types and styles of designs and layouts that a trailer park can take. Basically, when you contract an architect to help you design a trailer park, they will charge based on the complexity or simplicity of the design and layout that you choose.
In essence, the more complex the design and layout you want for your trailer park, the more money you will pay, and the simpler the design and layout, the cheaper you will be charged.
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The Types of Permits, Licenses, and Approvals You Would Need
If you are looking to build a trailer park in any city in the United States of America, you will be expected to obtain all the needed permits, licenses, and approvals from the appropriate authorities within your jurisdiction.
You should at least budget for a zoning permit, business license, land use permit, building permit, environmental impact clearance, health department approval, sewer, and water system permits, electrical and gas permits, fire department approval, signage permits, road construction permits, stormwater management permits, subdivision approval (if applicable), state and local health inspection, and state licensing.
Trust me, the amount you are expected to spend when obtaining all the permits and licenses listed above is going to be a significant part of the budget.
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The Cost of Landscaping and Aesthetics
Another major factor that can influence the cost of starting a trailer park is the cost you are expected to spend on landscaping and aesthetics.
When we talk about the landscaping and aesthetics of a trailer park we are talking about the design, layout, and maintenance of the outdoor spaces within the trailer park. Come to think of it, people will first be drawn to how beautiful your trailer park looks at the outside before they even consider coming in.
This is the reason why you must make sure you have a robust budget for landscaping and aesthetics when drawing your budget for your trailer park.
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Miscellaneous Expenses
Finally, apart from all the factors listed above, there are other factors that may be unique to each entrepreneur that can also influence the overall cost of building their trailer park.
We will classify such factors as miscellaneous expenses. As stated, miscellaneous expenses vary and they could cover expenses like land mortgages, construction loans, equipment financing, working capital, interest rates, insurance, taxes, professional consulting fees (such as architects, engineers, lawyers, and planning, design, legal compliance, and financial matters), and unforeseen contingencies.
In conclusion,
Going by the factors listed above, it is safe to estimate that it will cost an average of $100,000 to start a small-scale but standard trailer park in a suburban area. But if you decide to build a standard trailer park in an urban or prime commercial area, then you must be ready to spend over $250,000.