Although the terms ‘mobile home’ and ‘manufactured home’ are used interchangeably, all homes built after the Manufactured Housing Act of 1976 are technically considered manufactured housing. 

Here are the key characteristics of a mobile home: 

Factory Construction:
Manufactured homes are built in a controlled factory environment, where quality control measures are enforced. This results in homes that meet specific HUD construction and safety standards.

Clayton Homes Factory

Transportability:
These homes are designed to be transported on their chassis to their final location. This mobility allows for flexibility in placing the home on various properties.

Chassis:
Manufactured homes typically have a steel chassis that provides structural support during transportation. Once in place, the chassis might be concealed or integrated into the home's design.

Singlewides and Doublewides:
Singlewides are less than 18 feet in width, whereas Doublewides are greater than 20 feet in width. 

Doublewides typically consist of two attached singlewides, thus making a structure of 36 feet in width.

Given the increased size, double wide homes generally offer more square footage and a more spacious layout compared to single wide homes. 

They often feature a more diverse range of floor plans and may include amenities such as multiple bathrooms, larger kitchens, and more open living areas.

Park-Owned Home (POH): 
A POH is a home that is owned by the management or ownership of the park itself rather than by an individual resident. 

In this arrangement, the park operates as both the owner of the land and the owner of the home situated on that land. 

Given the park owns the home, a POH resident pays two rents: 
      - Home rent - the rent for the home itself
      - Lot rent - the rent for the land
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With a POH, the park owner is responsible for all the functions of a typical property manager. Home maintenance, repairs, etc. 

These homes generate more cash flow, however they require more management. 

Tenant-Owned Home (TOH):
A TOH is where a resident owns the mobile home that they live in but rents or leases the land or space within the mobile home park on which the home is situated. 

Given the tenant owns the home, they only pay a lot rent and maintain the home themselves. 

These homes don’t generate as much cash flow, however the homes require no maintenance. The park owner is only responsible for maintaining the infrastructure and the park itself. 

MHPs provide essential utilities such as water, electricity, and sewage connections. 

Water and electric utilities are fairly straight forward in how they’re provided to the community. Infrastructure exists, and the utility is brought to the community. 

However, in terms of payments, they are either 
a) billed back through a master meter or 
b) direct-billed

For master metering, the park has a single meter for the entire park. 

Costs are tallied up then billed back to the residents based on factors such as lot size, occupancy, or other allocation methods. 

Direct billing involves installing meters at each mobile home to measure usage. Residents are billed for their individual consumption and pay directly to the municipality.
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Sewer
Sewer systems are a little more nuanced. They vary widely but generally are split into two groups: public vs. private.

Public Sewer System
Some mobile home parks are connected to a public sewer system, which means that the park's wastewater is transported to a centralized sewage treatment facility operated by the local municipality or utility.

This setup is similar to how sewage is managed in traditional residential areas.

Private Sewer Systems
In parks located in more rural areas, private septic systems are very common.

Septic Tanks
Typically one septic tank will serve several homes.

Septic tanks collect all fluids, organically break down into effluent, and then the effluent is cleaned through the soil.

Park owners are responsible for maintaining septic tanks.

Lagoon System
A lagoon system involves the use of large, shallow ponds or basins to treat wastewater through natural processes of sedimentation and bacterial breakdown.

Lift Stations
In cases where the terrain is not conducive to gravity-based wastewater flow, lift stations might be used.

Lift stations use pumps to move wastewater from lower to higher elevations, enabling the sewage to reach the appropriate treatment or disposal site.

Package Treatment Plants
Some mobile home parks might have their own small-scale wastewater treatment plants, also known as package treatment plants.

Shared Sewer Infrastructure
In larger mobile home parks, a shared sewer system might be established, with a network of pipes collecting wastewater from multiple homes and directing it to a treatment or disposal point.

Differences between MHPs and RV Parks
‍We get this question a lot. 
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There are a few key differences, but here’s the shortcut: 

RV Parks are generally short-term hospitality and MHPs are long-term affordable housing. 

Below is a larger breakdown:

Simply put, there’s not enough affordable housing supply to meet the demand…

Nationwide, over 10.8 Million households in the US need affordable housing. 

But only 4 Million Affordable Units currently exist…

meaning there is nearly a 7 million unit shortfall. 

These trends play out similarly at a state level. 

For example, below is relevant data for the state of Tennessee

Tennessee Affordable Housing Stats

Tennessee Low Income Renter Stats

NLIHC Housing Needs

$26,500 / Year (Before Taxes)

$23,320 / Year (Est. After Taxes at 12%) 

$23,320 / 12 Months 

$1,943 / month take home

Not exactly lots of spare cash lying around. 

Tennessee Rental Stats

Here’s a table of what average take home funds are after paying rent in Tennessee

Note: This is aggregated over the whole state, each city is different

Housing Stock

Housing Shortfall: 129,343 units

NLIHC Housing Needs

Given the large shortfall, demand for the product is rather high. 

The average length of stay for a multi-family apartment building is 3 years. 

The average tenancy for a mobile home park tenant is nearly double that at 7 years. 

Some parks have average stays of 13 years or longer. 

The reason for this comes down to the cost of moving a mobile home. 

Although they’re called mobile homes they’re…not so mobile.

The cost to move and set up a home is $5k - $10k. This is a high figure for most residents so…

they end up staying put.

Baby boomers make up about 70 million people. 

Over the next decade, these folks will reach retirement age. 

What does that mean for their businesses?

Of that 70 million, they own an estimated 12 million businesses. 

Over the next decade, over 8.4 million (70%) of these businesses are expected to change hands.

Mobile home parks fall squarely in this category. 

Many parks have been owned by boomers for decades and the owners are ready to retire. 

This means more and more parks will change hands over the next decade.

These three driving factors are the main reason we’re so bullish on the MHP asset. 

Not only is there a high demand for the product among residents, all data indicate that the supply shortfall will not alleviate pressure in the next decade. 

What really excites us about the asset is the generational ownership shift. 

Over the next decade, we expect a large wave of wonderful parks will come available, and we hope to capitalize on that.