Wednesday, January 20, 2016

Buying Manufactured Housing in 2016

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.

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

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., 06 Jan. 2016. Web. 06 Jan. 2016.

"Healthy and Happy Markets." Health and Happy Markets. Axiometrics, 08 Jan. 2016. Web. 08 Jan. 2016.