What Are Manufactured Home Communities?
march 25, 2021
Before they were referred to as manufactured home communities, these communities were called trailer or mobile home parks. However, today they are known as income-generating properties that are highly valued by veteran investors. These days, manufactured home communities consist of households, families and retirees who enjoy this carefree lifestyle but have a much different image from the previous members. These properties can command impressive sales and allow the owners to see great appreciation of their homes. Despite this, a manufactured home community that is well-located can be very hard to find. Apart from the many communities that can be found in the United States, there are many up-and-coming ones that are being built to cater to the huge demand.
Why are They Becoming so Popular?
There are many reasons why manufactured home communities are becoming so popular to real investors and homeowners today. These communities have seen great publicity in recent years. Although this is not a new concept, the low Owners’ Equivalent Rent (OER) was only made public in the 1990s. Following this, 4 new REITs were created for manufactured homes. Till this day, Wall Street investors are still extremely bullish about these REITs. They continued to grow and develop communities despite the tough opposition by certain parties. This has artificially maintained the supply of manufactured homes and has led to popular communities to enjoy high occupancy and great sales prices.
Ever since these regulatory barriers have started to lax, there are more and more manufactured home communities being built. Existing ones have seen expansion by investors. Hence, this has led to increased competition for current owners, but creates better opportunities for potential investors wanting to enter this market. Furthermore, even developers of properties like nursing homes and people in the hospitality industry are beginning to see the value of manufactured home communities. They feel that this is an extremely practical and economical way to meet the huge demand for housing.
Constantly Improving Professionalism
With recent advancements in the manufactured home industry, property management has also seen impressive improvement. This has led to a continuously improving sense of professionalism that attracts more investment. Typically, when a manufactured home community has a greater occupancy, the owners and tenants need to pay less expenses because they can be shared and because there is lesser incentive to advertise for the community. Conversely, conventional service apartments need to deal with more ongoing maintenance with an increased usage of facilities when the levels of occupancy increase.
This entire industry of future development, disposition, and expansion has a very bright future. Every year, manufactured home community investors meet to discuss the industry, to network and talk about the various local issues that affect their investments. This gives more structure and certainty to the industry and has resulted in the formation of a council that exists inside the structure of the Manufactured Housing Institute (MHI). Now there are people who work full-time to ensure that the interests of these marginal investors are well taken care of and will most likely play an important part in elevating this industry to the next level.