Industry Characteristics

Over 20 million Americans – 6.6% of all US households – live in manufactured homes.

Homeowner rates peaked in 2005 at 69% and have been declining ever since – the rate in 2017 was less than 64%, which was the average rate in the 1960s. Tighter lending conditions and housing market uncertainty means that millions of American households cannot afford to return to conventional residential home ownership.

The economics of living in a manufactured housing community are compelling to many: manufactured housing community monthly housing costs are 40% cheaper than multifamily while the cost of a manufactured home is one-quarter the cost of a site built house.

The economic model for manufactured housing communities: manufactured housing communities rent lots to tenants who own their homes, which creates pride of ownership, which in turn leads to high occupancy rates, low maintenance costs, low expense ratios and stable and predictable cash flows. Cash flow can be increased with professional management and by bringing new manufactured homes into the community, which increases asset value.

The market is highly fragmented – the three publicly- traded REITs control only 2.3% of all manufactured housing communities in the US. The majority of manufactured housing communities are in the hands of small owner/operators.