Yes, and so did George Burns, Gracie Allen, Barbara Stanwyck, Greer Garson, Jack Benny, Claudette Colbert, and Danny Kaye. Even Lucille Ball owned a mobile home park. And then there’s Stanley Marcus – the founder of Neiman Marcus – who owned a mobile home park in Dallas. Effectively, all the stars and notable people of the 1950s owned mobile home parks at one point. Why?
Higher demographics than stick-built homes
One of the biggest shockers about the history of mobile home parks is that if you lived in one in the 1950s you had – in general – higher demographics than those that lived in stick-built houses. That means you had a higher level of education and higher level of income than folks in brick houses. How is that possible? Probably because mobile homes were a chic new housing option that was popular with young professionals that were stating their careers after the GI Bill put them through college. Mobile homes were particularly popular with veterans who lived in them during the war.
Huge demand
One quality of mobile home parks that has always been appealing is the fact that they are always in demand – whether it’s 1950 or 2024. That’s a 74-year run of success in being a hot commodity. But the demand in the 1950s came from upscale customers and today’s demand is for affordable housing. When you consider that a recently-built mobile home park requires more occupancy to be filled than today’s average turn-around park that’s maybe 20% vacant or less, then it suggests that most of the vacant lots in mobile home parks were filled in the early days.
High rates of return
The reason that Hollywood celebrities and Stanley Marcus got involved in the mobile home park industry was simple: money. In today’s dollars, the lot rents in mobile home parks were higher than they are today, ranging from $500 per month to over $1,000. When Bing Crosby built Blue Skies Village Trailer Park in Rancho Mirage in 1950 he was not interested in glamor, he was interested in greenbacks. Mobile home parks are the only U.S. real estate sector where 20%+ cash-on-cash returns are attainable and that’s as true today as it was in the 1950s.
A superior business model
Mobile home parks have featured the same business model since inception: a parking lot for mobile homes. It’s a concept built around renting land for a monthly fee. The beauty of the business model is that you don’t have to worry about fixing toilets or patching roofs, but simply providing access to utilities and decent roads and your job – as the owner – is complete. This results in very low management requirements and capital needs. One benefit of today’s mobile home park, over those of the 1950s, is that zoning is much more restrictive now and you have not been able to build new parks since the 1970s.
Conclusion
Mobile home parks have morphed over time from luxury to affordable housing. But they have remained consistent as a very simple and effective business model. You don’t have to be celebrity to buy one today, but you might make more money than you would in Hollywood.