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When it comes to real estate investing, mobile home parks have a negative connotation. Despite the stigma, they are the hidden jackpot of a real estate portfolio. Manufactured houses are the only asset class with a yearly increase in demand and an annual decrease in supply. There are fewer mobile home parks in America than previously because developers have converted the land for other purposes or because nomadic communities are driven away by pressure from municipal planners. 

America is experiencing a problem with affordable housing made worse by the pandemic and its reverberations. This issue is not going to be resolved anytime soon. At the same time, the cost of living is increasing while wages remain the same. This perfect storm amounts to a resurgence of interest in manufactured domiciles. Per The White House, the building and maintenance of hundreds of thousands of affordable lodging units over the next three years will help to eliminate America’s housing supply gap. The goal is to provide significant incentives to encourage the development of manufactured homes and to lower the obstacles to mobile home ownership for millions of Americans.

Although 10,000 Americans reach the age of 65 daily, just 60% of Americans have more than $10,000 saved for retirement. Given that elderly Americans are finding it difficult to buy more expensive homes, this might worsen the affordability situation. Fortunately, many of these retirees have equity in their homes, and many are ready to exchange that wealth for an affordable mobile home on a leased lot. They can have a yard, drive-up parking, and their own space, in addition to being a part of a community. Beyond the lower socioeconomic strata, other classes are relocating to mobile home parks seeking a lifestyle that offers them more financial and physical freedom and less labor as they near retirement.

Longevity is one of the reasons that mobile homes are a wise investment. The costs involved with apartment turnover include cleaning the property and scouting for new tenants. In mobile home parks, tenants often remain there for an extended period, and the buildings have a 90%+ likelihood of remaining in their original site for the duration of the property life. 

Of all the asset categories we have invested in or examined, well-run manufactured home communities have the lowest maintenance costs and capital expenditures. This is so because tenants generally rent infrastructure and soil from these parks. Mobile houses are owned (or purchased) by tenants. In other words, renters handle repairs and upkeep.

In the US, there are more than 40,000 mobile home parks. It is believed that 85%–90% of them are run by mom-and-pop businesses. Owners of a single asset manage their properties without many processes, financial controls, marketing tools, revenue management techniques, or a professional demeanor.  

Due to the difficulty in finding inexpensive housing, the imbalance between supply and demand, and steadfast tenants, investing in mobile home parks is a recession-resistant asset that you should pay attention to as you build your investment portfolio.