Is 2016 The Year to Finally
Buy That Mobile Home Park?
As we roll into the new year, it generally would be prudent
to look back over the previous. Markedly 2015's numbers are a pure pleasure to
peruse. Yardi Matrix data for 2015 shows a 6.4% increase across the 111 metros
they track for the average growth rate of the rental market. That's a 1.9%
increase in growth over 2014 which saw a 4.5% growth. This will make it the
sixth year in a row that rates of new renters grew according to MPF (the rental
market intelligence division of RealPage), with an average rate of 4.8%. These
strong numbers mean good ROI for investment rental properties, namely manufactured housing, but will the
numbers hold for 2016? To predict this we first must look at what has been
causing this increase of rental demand.
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| Manufactured Housing |
Rental interest is primarily determined by both the economy
and the availability of affordable for purchase private housing. With the
economy's slow but steady improvement in the last few years, and many people
looking to get out of their shared multi-generational homes or ditch the
roommates, interest in housing has been increasing. However, new housing
developments are still slow to grow, with actual growth falling 20% lower than
2015's predicted numbers. This has led to longer waiting periods for new
housing, higher housing prices, and thus increases in the demand for rentals. Interestingly though, apartments are losing out to manufactured housing communities, or as they are more commonly called; mobile home parks. But how will this affect 2016? Given that 20-30% of 2016's scheduled housing
developments have already been delayed until 2017, new renter and rental demand
growth has been predicted to do just as well as the 2015 numbers, if not
better.
 |
| Mobile Home Park |
But what about after 2016? Still
good news, as Axiometrics has predicted
that the national renter's market will remain strong and steady likely through
2020. Axiometrics is also predicting an occupancy average of 94.6%. These
numbers can all be tied to the changing desires of consumers. Millenials
are reaching the age where they are looking to get out on their own; but with
slower growing jobs, later ages of marriage, student debt, and a preference for
the flexibility of living a rental offers this demographic has become a strong
market presence. On the other end of the age spectrum Baby-Boomers with empty
nests and retirement approaching are looking to downsize. These two groups will
maintain, and even grow, the already robust rental market. Further more, these groups are looking to maintain the privacy of a house with the benefits of an apartment, meaning manufactured housing rentals are growing faster than apartments.
All of these factors make now and ideal time to buy, because
as demand for housing continues to increase so will the prices on investment
properties, namely manufactured housing communities. To get the best ROI, the sooner you can get into a good investment
property, the better.
Produced by Peterson Commercial: National Manufactured Housing Group
http://www.petersoncommercialgroup.com/
http://www.petersoncommercialgroup.com/
Contact Peterson Commercial:
PHONE: (520) 477-7350
FAX: (520) 477-7350
Works Cited
Bubny, Paul.
"Apartments Maintain Rent Growth Streak By Paul Bubny |
National." Apartments
Maintain Rent Growth. GlobeSt.com, 06 Jan.
2016. Web. 06 Jan. 2016.
"Healthy
and Happy Markets." Health and
Happy Markets. Axiometrics, 08 Jan. 2016. Web. 08 Jan. 2016.
