Whether you invest in multifamily homes (apartment complexes) or mobile home parks, you play a role in improving the options low and fixed-income tenants face for attaining and maintaining affordable housing. On top of that, both asset classes have historically been recession-resistant.
Mobile home parks are the last, most affordable option for some, with lot rent rates averaging around $300 per month. Compared to the average apartment rent of $1124 per month across the US, renting a lot in a mobile home park is much more affordable. In fact, for those under the poverty line making $26,000 or less per year, it may be one of the only places they can afford to live.
Through the real estate syndications we invest in, our aim is always to improve and revitalize the community while making sure the existing residents are living in a safe and improved community and creating a win-win situation for all.
In this article, we’ll share with you how investing in a mobile home park protects residents, helps solve the affordable housing crisis and improves living conditions for low-income families.
How Real Estate Syndications Help With Affordable Housing
My father worked hard to support a family of 7 on his blue-collar income, I was a latchkey kid at the age of 5, and after all that dedication and perseverance, my parents moved into section 8 housing upon retirement. He, unfortunately, lost a bit of his retirement portfolio in the stock market, and he didn’t have 10 or more years for his portfolio to recover before retiring. My first-hand experience of what it’s like to have a family on a low income educated me in ways I can’t explain.
But here’s the thing, this problem isn’t going away. With 38 million people in the US below the poverty line, syndications are one significant way to invest in alignment with my passion for improving living conditions and creating safer, healthier communities for those who need it the most.
One of the most significant reasons I love real estate syndications is that with each investment you get the opportunity to improve a community. You and I have the chance to pool our money together to help hundreds of people at a time to feel pride in their living situation instead of feeling like they’re trapped or that they have no other choice.
Improving the general vibe in the community can be done with a few minor improvements (more about that later) that don’t require much capital yet go miles toward…
- Safer living conditions
- Helping tenants feel appreciated
- Improving the park’s reputation
- Providing that dedicated community feel that’s often missing
Your passive investment in a mobile home park syndication is an incredible opportunity for you to have a hand in improving these communities, creating more green space for children to play, cleaning up “eyesores,” and helping mobile home park tenants feel cared for, protected, and valued.
So, how does investing in a real estate syndication do all these incredible things? I’m so glad you asked!
Affordable Housing For Those Who Need It Most
First, let’s define “affordable housing.” For housing to be affordable, the total cost of rent/utilities needs to be less than 30% of ones’ household income. 2014-2018 data shows the median income in the US to be about $60,000 per year. This means US residents generally need housing priced at or below $1,500 per month.
However, 38 million people in the US fall far below that median and are scraping by at a household income of $26,000 per year. For them, affordable housing means a per-month rate under $650. Here we have to stop and consider the 10,000 baby boomers retiring per day with little or no savings.
For many, a social security check makes up about half of their income. With the average social security check being about $1,500 per month, we can guesstimate that these people need affordable housing more than ever. There’s no way they could afford an apartment with rent being as much as their entire paycheck! As it turns out, with average lot rates of about $300 per month, mobile home parks provide the last-rung of affordable housing available.
How You Can Help Protect Mobile Home Park Residents
Historically, mobile home parks are owned by mom ‘n’ pop owners who don’t necessarily know how or even want to run the park like a business. This could fuel the negative perceptions because disorganized management generally leads to messy grounds, inattention to leaks and potholes, and the overall perception that residents and owners don’t care.
From the outside looking in, it’s easy to assume that if the land were sold to a big corporation and developed with a high-dollar, economy-boosting business, this would solve everyone’s problems. However, in reality, these larger corporations often focus more on the bottom line than the lives of the residents in the parks.
There are approximately 44,000 mobile home parks in America. Unfortunately, this inventory is declining by 1% each year as they are closing more down than they are building.
Displacing Residents From Their Communities
Often, mobile home park residents are living well below the median income and can’t afford to move their homes or rent more expensive apartments nearby.
If large corporations were to purchase the parks, shut them down, and develop high rises or condos, where would these low and fixed-income residents move to? Often, they have children enrolled at local schools, they have jobs nearby, and they’ve built a life in that community.
Furthermore, if park tenants did own their manufactured home, it would cost about $5,000 to move the house IF they can:
- Gather that kind of cash and
- Find a new lot nearby to park their home
Considering that most Americans, including those earning much more than the median income, typically don’t have $1,000 in savings, this is pretty much an impossible situation for mobile home park residents to face.
How Investing In Mobile Home Park Syndications Helps Communities
I tell you all of this so you can begin to see that investing in a mobile home park prevents the land from being sold to developers and saves tenants this life-changing strife. When a real estate syndication group like BlueDoor Equity buys mobile home parks, we protect the residents from being displaced by developers while preserving their (often the only option for) affordable housing.
How We Improve Mobile Home Park Communities
Another way that investing in mobile home parks through a real estate syndication helps residents is because we have a vested interest in creating a community in which tenants want to live in.
Since our goal is to provide affordable housing to tenants, the sponsor team and property management have a duty to make the park as safe and as attractive as possible through low-cost yet highly impactful improvements that will alter the overall vibe of the community while keeping rent increases to a minimum.
Budget-friendly improvements that go a long way in creating a sense of pride in tenants include:
- New pavement /asphalt on roads & driveways
- Proper drainage of the property
- Filled-in potholes
- Fresh landscaping
- Fencing
- Individual trash receptacles
- Green space in which kids can play safely
- Fresh paint
- Skirting
- And more
Many of these can be done as part of the business plan with minimal raises to lot rent rates, and all of them improve living conditions for the families on-site.
Creating A Strong Sense Of Community
Another more invisible, under the surface benefit to investing in mobile home parks is the opportunity to implement programs that low-income families might need but otherwise not have access to.
To create a community that functions as one, neighbors need to know each other, feel protected and protective of one another, and be willing to openly discuss concerns without fear of rent hikes, retaliation, or being chastised.
After-School Programs For Children
As investors, we have the chance to provide, for example, complimentary after-school programs for the community children, where they’re safe, supervised, and even assisted with homework or taught socio-economic skills. BlueDoor Equity and our partner operators have this program as part of our business plan in one of our multifamily properties.
In this example, both parents could work full time and have confidence that their kids are taken care of, possibly doubling the household income. Consider the effect it might have on a community if a quarter of the residents in a community could double their household income!
Resident Appreciation Programs
Other organized programs like a neighborhood watch, BBQ cookouts on holiday weekends, ice-cream socials during the hot summer, and fall evening movie night under the stars are all ways management can encourage residents to come together, get to know each other, and, at the same time, keep a so-called ear to the ground on tenants’ concerns or needs.
The more we can do to foster camaraderie, implement programs to help solve low and fixed income tenants’ needs, and improve the communication between community members and park management, the more we’ve contributed to saving this last, most affordable option for the people that need our help the most.
Conclusion
All in all, your investment in a mobile home park, protects the residents from being displaced by big corporations, restores a sense of pride because the park is well maintained and clean, and creates camaraderie between neighbors.
By improving the appearance of the lots, listening to residents and addressing their concerns, and creating programs and events that bring people together, new ownership is often a healthy change from the mom ‘n’ pop management and helps create a safer and more inviting community for all the residents.
To explore our past and current real estate syndication opportunities in mobile home parks, apartments, and other commercial properties where we’re improving communities year-round, join the BlueDoor Investor Club today. I look forward to getting to know you and your investing goals so that I can share upcoming opportunities with you and help you have a helping hand in protecting and helping mobile home park residents too!