Investors Set Sights On Mobile Home Parks As Demand For Affordable Housing Surges

Because of high housing costs, mobile home parks are becoming more popular with various types of tenants. Wall Street is capitalizing on this trend and has been investing in both mobile home parks and build to rent communities.

Build-to-rent communities refer to building large tracts of single family home communities to rent them out long term. Mobile home and build-to-rent tenants stay in their communities much longer than apartment tenants, making them even more enticing for investors.

Browse Private Equity Real Estate Investment Offerings on Benzinga

Two Key Benefits of Investing in Mobile Home Parks

Lower Cost Per Unit: One of the main benefits of mobile homes is that investors can get more units for a lower cost per unit. An investor could purchase a five-unit apartment building for $1 million with a cost per unit of $200,000. On the other hand, an investor could have a cost per unit of $10,000 if they bought a mobile home park with 100 available lots for $1 million.

Tenants are Responsible for Repairs and Maintenance: With mobile homes, the tenant owns the actual home, but the investor can own the land. Since the tenant owns his or her home, he or she would be responsible for repairs and maintenance. Investors can save even more money by not having to be responsible for these repairs. This expense is also more important since the price of many resources, including lumber, has increased by over 200% since 2019.

Alden Global Capital Acquires Chapel Hill Mobile Park

Alden Global Capital, a New York-based hedge fund, has stakes in real estate throughout the U.S. It recently acquired a mobile home park in Chapel Hill, North Carolina, which has been controversial in the local community. Residents have been complaining that the hedge fund has been raising rents without improving maintenance or amenities. Rising rents have pushed these tenants into mobile home units, and even higher rent could result in more homelessness.

The Carlyle Group Buys Four Mesa Home Parks for $230 Million

This hedge fund manages over $301 in assets under management (AUM) and has stakes in newspaper firms and real estate. It bought four mobile home park units in Mesa, Arizona, for an average cost per unit of $145,293. Aside from Arizona, the Carlyle Group Inc CG has also acquired mobile homes in Florida and California. These three states are prime locations since they are part of the Sunbelt, which has some of the fastest appreciating real estate markets in the U.S.

West Valley MHC: A new Mobile Home Investment Opportunity

Accredited investors can invest in mobile home parks using RealtyMogul. One of RealtyMogul’s newest offerings is West Valley MHC, a mobile home community with 411 units in Las Vegas, Nevada, with each one renting for an average of $811 per month. West Valley MHC is promising since it’s located in Las Vegas, which is one of the top-five rated U.S rental markets in rent growth and demand.

Check out this offering’s key statistics.

Bottom Line

Housing prices are continuing to soar, prompting some to relocate to mobile home parks. Mobile home parks have cheaper lot rent and general costs compared to traditional apartments. Wall Street firms like The Carlyle Group and Alden Global Capital recognize this and are pouring funds into this space. Accredited investors can also access this booming real estate market by using sites like RealtyMogul.

Photo by Roger Starnes Sr on Unsplash