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Mobile Home Parks (MHPs) have long been a staple in the American housing landscape. However, despite their prevalence, there are numerous myths and misconceptions surrounding this unique real estate asset class. In this article, we'll debunk some of these myths and highlight the lucrative opportunities that MHPs present for savvy investors.
MHPs are for Low-Income Individuals Only:
While MHPs do provide affordable housing options, they cater to a diverse range of residents, including retirees and young families. The appeal of MHPs lies in their community-centric approach and the value they offer. The country’s average mobile home lot rent is $380 per month. However, the rate varies depending on several factors and could start from as low as $100 and go to as high as $900.
MHPs are High Maintenance:
Contrary to popular belief, MHPs often require less maintenance than traditional residential properties. Since residents typically own their homes and lease the land, park owners are primarily responsible for common areas and park infrastructure - i.e. the “dirt” underneath the home.
MHPs are Not Profitable:
MHPs can generate consistent cash flow. With lower turnover rates compared to apartment complexes and the ability to increase lot rents, MHPs can offer attractive returns on investment.
Affordability Crisis Solution:
With the rising cost of housing in urban areas, MHPs provide an affordable alternative. They address the housing affordability crisis, making them an essential part of the real estate ecosystem.
Barriers to Entry:
Zoning restrictions and the challenges associated with developing new parks mean the supply of MHPs is limited. This creates a competitive advantage for existing park owners and reduces the risk of oversupply.
Digital Marketing Advantage:
Many MHP owners are not maximizing the potential of online marketing. Investors with digital marketing expertise can significantly increase occupancy rates and revenues by leveraging online platforms.
Population Shifts:
The recent trends of remote work and the desire for community-centric living have made MHPs more appealing. As people move away from crowded cities in search of affordable housing and a sense of community, MHPs stand to benefit.
Value-Add Potential:
Many MHPs, especially those owned by smaller operators, have untapped potential. Strategic upgrades, community events, and improved management practices can increase the park's value and rental income.
Why Consider Investing with Patriot's Commercial Real Estate Funds?
At Patriot, we recognize the potential of Mobile Home Parks as a resilient and profitable real estate asset class. Our deep industry knowledge, combined with a strategic approach to acquisition and management, positions us to capitalize on the opportunities MHPs present. By investing in our commercial real estate funds, you gain exposure to a diversified portfolio of MHPs, managed by a team of industry experts. Our focus on value-add opportunities and operational efficiencies ensures that we maximize returns for our investors.
In a world filled with volatile investments, MHPs offer stability, consistent cash flow, and the potential for capital appreciation. If you're looking to diversify your investment portfolio and tap into the lucrative world of MHPs, consider partnering with Patriot.
Next Steps: Interested To Learn More or Invest In Commercial Real Estate?
If you would like to learn more about our Open Funds or invest in Commercial Real Estate please contact our investor relations team by completing the New Investor Form here (it will take less than 2 mins).
