Why Covid-19 Has Failed to Harm Mobile Home Park Investments
by Frank Rolfe
The Covid-19 pandemic has ushered in a new era in American real estate investment. Overnight, some asset sectors such have plunged in value. However, some have been only marginally impacted and one has actually become stronger. That special asset sector is the old-fashioned mobile home park. So why have mobile home parks fared well while other niches of real estate have been crushed by Covid-19?
Most residents of mobile home parks fall into two categories 1) retired or 2) essential jobs. The basic backbone of our country—the jobs that keep the engines running and the food on the table—fall upon the employment sector that traditionally has lived in mobile home parks such as fast food, auto repair, and shipping. So while the government shut down all “non-essential” industries at the start of Covid-19 back in March, this had little impact on mobile home park occupants.
And those that lost their jobs were in the sweet spot for finding employment: minimum wage to $15 per hour labor opportunities. These are exactly the type of employees sought out by such companies as Amazon and Domino’s pizza—both of which grew their employment basis during the pandemic. If you look down any street in the U.S., you will see the only “Help Wanted” signs are for jobs paying $15 per hour and less.
It’s no shocker that a huge amount of Americans (estimated to be over 30%) are in need of housing they can afford. Indeed “affordable housing” is one of the nation’s biggest challenges. While the national apartment rent averages over $1,200 per month, mobile home park lot rents average around $280 per month.
This huge price variance has made mobile home parks one of the hottest sectors of real estate. Many mobile home parks receive over 100 calls per week from Americans seeking places they can afford to live on their salaries. And this trend is only accelerating.
Prior to Covid-19, apartments had strong rents and occupancy. However, now the tables have turned on what attributes Americans want in their housing. Mobile home parks offer things that apartments can’t including:
- No neighbors knocking on your walls or ceiling
- A yard that you can use as an outdoor space for yourself, kids or pets
- Parking by your front door and not an impersonal parking lot
- A sense of community with neighbors who are not transient
- The ability to be a homeowner
Many apartment dwellers—after spending months stuck at home—hare realized the short comings of attached housing and now seek out detached options that meets their budget. The stimulus money for Covid-19 has helped mobile home park residents and owners more than probably any other declaration. When the $1,200 per adult and $500 per child was handed out, there were no strings attached on having to have lost your job to get it.. And many of these groups then used that money to move to a mobile home park. Indeed, our sales and rentals have never been as strong in any other period prior to the Covid-19 pandemic as they are now.
Mobile home parks have fared extremely well during Covid-19, unlike many other sectors of real estate. And we anticipate this to continue as the megatrends of modern America continue to all be favorable for “trailer parks”.