Corporate landlords are snatching up mobile home parks and jacking up the rent (55, moving)
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Corporate landlords are snatching up mobile home parks and jacking up the rent — here’s why such cheap properties are so appealing to wealthy investors
... "Put simply, the entry price for these parks is much lower than multi-family apartments and condo buildings across the country.
Professional investors can also raise rents significantly to improve the valuation of the property. Attracting tenants with higher incomes or improving the park’s amenities and infrastructure are other value-add strategies that make this asset class appealing.
The fact that moving a typical mobile home costs between $3,000 to $10,000 also means that most tenants are unable to afford the move. This gives landlords immense pricing power." ...
... "The largest mobile park landlord is real estate veteran Sam Zell. Zell’s Equity LifeStyle Properties (ELS) owns 165,000 units across the country, and the asset is a key element of his $5.2 billion fortune.
In recent years, larger investors such as Singapore’s sovereign wealth fund GIC and private equity firms such as The Carlyle Group, Brookfield, Blackstone and Apollo have also added exposure to this asset class.
Even Warren Buffett is involved. His firm’s subsidiary, Clayton Homes, is the largest manufacturer of mobile homes in the U.S., and also operates two of the biggest mobile home lenders, 21st Mortgage Corp. and Vanderbilt Mortgage." ...
Little by little they are pricing the people who fall into the gap between the low-income assistance qualifiers and the middle-income folks right out of the market. Many mid-income retirees have depended on the mobile home park market for housing for years. As the new owners jack up rents, the MH dweller still may have mortgage payments on their coach to pay too, and moving a used MH is just not really an option as most parks either don't have vacant spaces, or won't accept used coaches moved on-site. Do we have any MH dwellers on this forum,and have you experienced any shocking rent increases with new park owners?
Also parks are being sold because the land is valuable and as you pointed out it’s too expensive and difficult to move the homes. Paying to dispose of one is also expensive.
Yes. This is a phenomenon that's been going on for the last few years. This sector is attracting REIT investment and there are many articles on this topic. I remember posting something on in the last few months.
For the most part, the mobile homes are a misnomer. Most are manufactured homes on rented land. So, the owners have some significant investment but no control over the land rent. Not a good situation that was always ripe for exploitation. Now it is being exploited.
It's a big struggle, because investors have deep pockets, and the zoning / land use of buying an existing park can generate huge profits. Usually by raising rents, forcing people out, bringing in more expensive homes and rents, then reselling on the future cash flows (or tear down and build condos.)
The big push now is the large demand for housing and fewer starter homes being built (due to increased costs and lower profits)
I work for a county with very expensive property that is really out of sorts with local wages.
It is getting difficult to find anything other than 1BR or studio for under $1,500/month in rent. Basically any detached SFH is going to go for at least $2,000+/month. With prices at or near all-time highs and interest rates at nearly two decade highs - at least for the 2BR apartment/condo size and below, it's actually cheaper to rent than to buy right now.
Even though it's a touristy area, the number of mobile home parks are actually increasing because they're filling in the gap between small apartments and SFHs. They're kind of becoming the housing of last resort because of the relative affordability
It's a big struggle, because investors have deep pockets, and the zoning / land use of buying an existing park can generate huge profits. Usually by raising rents, forcing people out, bringing in more expensive homes and rents, then reselling on the future cash flows (or tear down and build condos.)
The big push now is the large demand for housing and fewer starter homes being built (due to increased costs and lower profits)
I had never heard of ROC USA, so thanks for sharing! I love this idea and hope it continues to grow.
My in-laws bought a modular home on a lot in an FL over 55+ community years ago that my MIL still uses in the winter. A developer was going to purchase it and the community sold shares and bought it themselves, keeping monthly expenses lower. Buying into one of these communities is the only way to have reasonable costs. In our FL town lot rents can be as high as a thousand a month if the land is owned by a corporation. Owning a home with no control over the lot is never a good idea..
In Houston, mobile home parks are being bought and demolished for new construction. Some of the hottest townhouse farms are former mobile home parks.
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