The hunt for yield has pushed private equity firms and professional investors into new segments of the real estate market.
In recent years, sophisticated investors have snapped up multi-family units and single-family homes. Now, corporate landlords are targeting the most cost-effective segment of the real estate market: mobile home parks.
The most affordable U.S. housing option
Manufactured homes or mobile homes are considered the most affordable non-subsidized housing option in America. That’s because the owners own only the prefabricated unit and not the land under the home. The land is usually leased from the landlord of a trailer park.
The average monthly rent for a mobile home in 2021 was $593. That’s significantly lower than the average one-bedroom condo rental rate of $1,450. The mobile park rental also often includes utilities and insurance.
Rents typically rise 4% to 6% annually, and renters have the flexibility to move their housing unit to another park. These factors make the manufactured home highly attractive to low-income households.
I know some people who are elderly (fixed income) and permanently disabled living in those parks because they cannot afford the rents in other places. The only reason rents should go up is due to taxes or increased fees for the land use (utilities, water, septic upgrades) paid by the lot owner. These slumlords are the biggest bottom feeders, EVER!
I moved into Hebron Woods in August 2018 and land rent was 280.00 a month. Starting this January, it is now up to 460.00 a month. Owners of park when we moved in did sell not long after we had moved in. While I understand some prices may have increased, I feel this increase in such a short time is outrageous.
It’s absolutely ridiculous what the trailer parks are charging for monthly lot rent! Some of the parks are dumps and should never be allowed to charge what they do.