Investing in Manufactured Housing

The manufactured home industry is a dynamic and growing sector. Despite an aura of being low class, the industry — which is alternately referred to simply as trailer parks — has significant market share among all real estate properties in the United States. And there is ample reason to believe that this market segment will continue to grow.

Despite the low-class stigma, manufactured home communities, like all other forms of real estate, run the gamut. It is certainly possible to find true mobile home communities, with dirt roads and only the sparsest necessities, that fit the bill of the typical low-class image that these communities often elicit. However, on the other end of the spectrum, one can find manufactured home communities in retirement destinations like Florida that may go for well over $500,000.

Mobile & Manufactured Home Communities

The industry is primarily divvied up into two main categories. These are true mobile home communities and manufactured home communities. A true mobile home is different from a manufactured home in that it is not permanently attached to a foundation. While both types of homes can be colloquially referred to as trailers, only true mobile homes are actually designed to be easily moved. A typical manufactured home will spend all of its life on a single lot.

Where is the industry heading?

All macro analyses seem to indicate that the manufactured home industry has a very bright future in the United States. On the one hand, increasing concentration of the economy on lower-paying service sector jobs means that the lower entry price and monthly costs associated with manufactured homes will continue to maintain strong popularity among the American working class.

On the other hand, the impending retirement of the Baby Boomer generation means that demand for high-end, age-restricted mobile home communities that are geared primarily at retirees are going to continue to surge in growth and demand. At the high end, these communities can directly compete with luxury condominium properties and upscale senior living arrangements. At the lower end, demand is also likely to be strong as manufactured home communities are often in direct competition with local apartment communities, providing an enticing alternative to the often high-cost, low-amenity living that apartments offer.

At their best, manufactured home communities can offer the same atmosphere, space, and neighborhood vibe as condominiums or standalone housing but at a monthly cost more typical of apartments.