Have you noticed how much of the data our industry uses is based on published reports from the REITs and largest owners (and the roughly 4,000 mobile home parks they represent) and the Federal Government (which owns no parks)? These stats not only inaccurately reflect the actual numbers but anyone who is an active participant in the industry quickly realizes that they are wrong because they violate the instinctual reality of what they see all around them. Let's explore some of the worst of these offenders to our collective common sense.
Mobile home park average lot rents
Someone recently wrote that the average mobile home park lot rent was around $700 per month. The source? Some reports from REITs or similar groups and those who track them. While that's a terrific idea and might well be the lot rent of the future for the other 43,000 mobile home parks in America, we all know – based on looking at thousands of parks for sale – that the real number is closer to $300. Let me ask you, how many parks have you looked at recently in which the lot rent even exceeded $500 per month? Yes, probably none. There are a ton of properties, right now, with lot rents in the $200s, and there are entire states like Mississippi where many rents are barely over $100 per month. When you average all of those together – from the dirt road park to the nice REIT property – I believe you end up with around $300 per month. But I am 100% positive you don't end up at around $700 per month. That's laughable and insulting to all our collective intelligence as park buyers/owners. However, if you are a REIT or similar group, it's very possible. But there needs to be a giant disclaimer on any such statement that says "this only reflects roughly 10% of all mobile home parks". Even a Google search of the question of "what is the average lot rent in the U.S.?" yields the following answer:
According to most experts, the average lot rent for a mobile home in the U.S. is around $380 per month; however, this can vary significantly depending on the location, park amenities, and size of the lot, ranging from as low as $100 to as high as $900 per month.
Apparently, even the internet is not as dumb as some "experts".
Average mobile home sales prices
The government delights in claiming that mobile homes cost over $100,000 in the U.S. Here's what Google says if you ask it "what does the average mobile home cost in the U.S.?":
In March 2023, the Census Bureau's Manufactured Housing Survey (MHS) reported that the average sales price for a new manufactured home was $128,300.
Once again, that stat's about as realistic as saying that Biden is sharp as a tack. Every park owner in America knows better. I would say that the average used home in a mobile home park is probably $30,000 tops and $60,000 new. And that's not even giving much weight to all those 1960s to 1980s models that sell in parks all the time for $1,000 to $5,000. So how did the government get this number so wrong? Well, that's because they rely on data from the manufacturers, who only sell new homes, and not from any data built on the other 99% of home sales, which is conveniently not tracked. How many parks have you looked at recently that are trying to sell homes for around $128,300? Zero, right?
Once again, pretty stupid data.
The number of Americans who live in mobile home parks
This one has been a joke for decades now, as it's built on a half-truth and the media runs blindly with it. Here's the number that the internet tells you if you ask it "what percent of Americans live in mobile home parks?":
Roughly 20 million Americans live in mobile homes, which is about 7% of the US population.
But if we just add to the question "mobile home parks" we get told:
About 6% of the US population, or more than 20 million people, live in mobile homes.
And then if we ask how many live in mobile homes on their own property we get:
There isn't much information about how many Americans live in mobile homes outside of mobile home parks.
But the problem is that not all mobile homes are located in mobile home parks. Instead, they are to be found on privately-owned property across America. Here's what common sense tells us. If there are indeed 20,000,000 Americans living in mobile homes, with an average household size of two people per home, and there are 44,000 mobile home parks in the U.S., then the average park would contain 227 lots. We all know instinctively that there's no way the average park is that large. The real number, based on our experience, is more like around 100 lots on average. So I think it's a safe bet that roughly half of those who live in mobile homes do so on their own land. Simply driving across America – or living in a small town like I do – is all the evidence I need to know that I'm right. So parks do NOT represent 7% of the population, but more like 3.5%.
Why all the inaccuracies?
Our industry has done a terrible job of tracking any data other than manufactured home shipments (but that one item they can tell you with pinpoint accuracy all the way back to the 1950s). Why is that? Because apparently the mobile home park owners of America never wanted to pass the hat to pay to get the data tracked on such issues as lot rent amounts, total lots, or occupancy. If they had, every media outlet would be able to get the correct numbers on Google, which they can't even remotely do right now. This not only embarrasses our sector with our peers but denies many groups access to the data they need to compare success or failure on individual properties – the kind of data that lenders would like to see but can't.
How this damages the mobile home park industry, or is it just part of the "Free Rent Movement" plan?
It's never smart to have no collective data on an industry. It gives forth the image that either 1) the industry is not worth tracking or 2) those in the industry are too stupid to collect or explore their stats. Clearly, neither of these are true, so this absence of accurate data is just adding to the negative "stigma" against the industry. But there are more sinister risks, which are being used by the woke "Free Rent Movement" advocates. Here's how they like to spin the "bad" data out there:
- They claim that lot rents are ridiculously high and, as a result, raising them even a penny is abhorrent. That's an absurd position to take, but they claim that the data supports it. If you are a "Free Rent Movement" promoter you clearly want to skew the national average lot rents as high as you can go. Of course, even for those REITs at $700 per month, they are nearly 70% less than apartments, so only an idiot could criticize that.
- They claim that mobile homes are terrible investments because they cost too much. I would be the first to admit that if mobile homes cost $130,000 they would not be much of a value, nor an important piece of the affordable housing puzzle. But the truth is that, at $1,000 to $60,000, mobile homes cost less than most cars and are the lowest priced housing option on the earth. But, once again, the "Free Rent Movement" folks want to use the faulty data to make their case that mobile home buyers are "suckers" and are being fleeced – which is a complete lie.
- They claim that park owners control too big a piece of the housing pie. If mobile home park owners represented 7% of the U.S. population – around 20 million people – then that would be a pretty big number. But, at the true number of around 10 million and 3.5%, that's significantly less impressive. Of course, the "Free Rent Movement" loves to use the larger number to make mobile home park owners seem even bigger an "evil" than they really are, in their eyes. And that bigger number makes politicians wrongly assume that they're working on a much more significant issue than it really is.
How to fight back
So how can you fight back against all the false narrative and bad data out there? First of all, don't go along with it and call out the falsehoods. Explain to lenders and politicians the real numbers, their origin, and why the "Free Rent Movement" advocates are using the wrong data to make a case that doesn't actually exist. You should also join your state MHA, which knows the true stats and advocates for your best interests on a regular basis. There has been much negative legislation shot down by state MHAs in recent years, simply by re-educating legislators and exposing the lies of the woke media that aggressively promotes the "Free Rent Movement".
Conclusion
If you want true discussions based on the real information about our industry, then stick with MHU. We offer you an endless stream of free articles, podcasts and Lecture Series Events that are based on the fundamental building block of information derived from real park owners and operators that won't violate your common sense.
And if you want to learn the correct way – not the flawed data – of how to identify, evaluate, negotiate, perform due diligence on, renegotiate, finance, turn-around and operate mobile home parks then examine our Mobile Home Park Investor's Boot Camp, Masterclass, course or books.