Institutional Investors Moving to Trailer Parks?

Large investors are targeting trailer parks, which is a shift from usual mom-and-pop ownership. Small investors tend to have more understanding of the community living in mobile home areas, so the new owners don’t usually receive a warm welcome among the residents.

Nationwide, this affordable housing option is being endangered by some greedy investors. As prices and rates make single-family homes an increasingly expensive investment, investors are finding other options. However, some of them are taking advantage of people who have no other choice but to get priced out to homelessness.

Residents of Mobile Home Parks

Around 20 million people live in about 40 thousand mobile home communities across America. Most of those people are living off of a very low income, some have disability pensions, and others are undocumented.

Additionally, people who get out of prison and can’t secure employment afterward find their homes in mobile homes. It’s safe to say that many residents of these communities are marginalized.

Mobile home parks are what saved many families from total homelessness after the market crash in 2008. That is because they are affordable. Better yet, they used to be.

Even before the pandemic, trailer parks gained attention from big institutional investors, who realized the investment potential and came with cash offers. Then, they started raising rents.

Raising Rents in Mobile Home Parks

Noted, a significant amount of trailer parks were built in the 1960s and 1970s and never have been restored or renovated since then. Many mom-and-pop owners didn’t invest after the initial purchase, simply because they had a steady income flow from the low rents they established. That allowed them to keep the rents way under the market price.

As soon as the small family business owners get swapped out with large investors, the rents increase monthly. In fact, one of the biggest mobile home park owners in the country teaches that this is the biggest perk of investing in a trailer park - you can up the rent as much as you can and still keep it below the market.

The first increase happens just upon the purchase, and with each renovation, such as fixing old pipes or putting pavements - come more rent increases. Residents can rent out a spot through an owner or a trailer through a third party. The owner increases the rent for the plot, and rents for the trailers follow.

They Made A Science Out of It

As mentioned above, there are some large investors who found a new way of making even more money out of trailer parks - they created boot camps and crash courses about this kind of investing. This lucrative business idea, however, leaves many people with few options.

On the one hand, the rent increases are heavy for their fixed-income wallets, especially those who live off social care. On the other hand, they cannot find lower rents anywhere else, as even with increases, they are still below market value.

The reasoning behind the greedy investments is, unfortunately, contained in the logic: raise the rents as much as possible - they don’t have anywhere else to go. And, truly, American trailer parks are the last line of really affordable housing in this country and the step before homelessness.

Author:

Zachariah Peterson , CMO /

Zach has broad experience in marketing, technology, and finance, and he has held leadership positions at multiple startups since 2017.

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