Mobile Home Parks (“MHP”), also known as “Manufactured Housing”, make up the largest pool of affordable housing in the USA. 22 million residents live in manufactured housing comprising 8.5 Million manufactured homes, or roughly 10% of the nation’s housing stock.
Manufactured housing represents a legitimate solution to the inherent housing shortage, yet it is frequently criticized by other inhabitants and lawmakers who live nearby, misunderstood as an unattractive, even unwelcome presence (i.e – “not in my back yard” – NIMBY mentality). Yet for many millions of Americans, it offers a way to own a home affordably and in equal or better locations than many higher priced homes, or even other apartments for rent. Today’s parks are also more attractive than many would give them credit for.
Further, given the fragmented ownership of manufactured housing parks, coupled with massive supply constraints (there have been virtually no new mobile home parks opened over the past two decades), there remains a compelling opportunity to purchase, renew & renovate, and boost efficiencies on MH parks going forward.
Performance Realty is positioned to take advantage of this opportunity today, through its operating experience, and ability to turn around mis-managed “Mom & Pop” smaller parks, brand them, and roll them into an efficiently managed, cash flowing portfolio of assets.
Lastly, history has validated this premise. MH parks have been a consistent, cycle-tested, even “recession-proof” investment class over the past few decades. Why? MH park tenants (our tenants usually own their home) have demonstrated through all economic climates that they pay their rent consistently and timely. They are motivated, proud homeowners, and can afford to pay their pad rent.
One last footnote: the term “mobile home” is a misnomer. The average cost to re-locate a manufactured / mobile home is approximately $6,000 or more, which is a compelling factor in determining if a resident would like to, or has the financial flexibility to vacate.