Mobile home parks have long been a part of the senior living landscape, and they have emerged as one of the most in-demand product types in recent years. They offer investors stability and steady returns, and they provide older adults amenities found at other senior housing communities at more reasonable price points.

In fact, senior mobile home communities can be an affordable alternative to the ongoing trend of luxury active adult construction, and offer amenities and a sense of community on par with — and in some cases exceeding some of the new age-restricted housing offerings.

My friends at 4-Peaks Capital Partners have been investing in mobile home parks over the past several years. Today they own about 2000 pads. Mike Ayala from FourPeaks Capital Partners was a guest on episode 149, on June 16 of 2018.

In spite of the many misconceptions associated with mobile homes, the housing type has a long and rich history in the U.S. The first mobile homes in the country were built in the 1870s, and mobile home construction saw a boom period after World War II.

Today, 22 million people live in mobile homes in the U.S., according to data from the Manufactured Housing Institute. In 2017, 93,000 mobile homes were built in the U.S., accounting for 10% of new single-family home starts.

As more baby boomers enter retirement failing to fully recover the wealth they lost during the Great Recession, well-managed senior mobile home communities are viable options to extend quality of life and financial nest eggs.

Investors and major brokerage houses have taken notice. For example, I’m on a mailing list from Colliers International that is focused only on mobile home park and manufactured housing opportunities across North America. We just completed our own new RV Park last year. When the original purpose of that park reaches its end of life for workforce housing. It has been designed to convert to a mobile home park with the full infrastructure already in place for that conversion.

Demand for senior mobile home communities is also driven by how few opportunities there are in the market to acquire a quality community. There are some value add deals, and in my opinion a property should be somewhere near 50% occupancy to offer an effective value add opportunity.

A lot of investor interest is being driven by real estate investment trusts and private equity money seeking to build large portfolios, from which long-term value can be created via solid management and economies of scale.

Equity Lifestyle Properties is real estate mogul Sam Zell’s publicly traded mobile home REIT. It is the largest owner of U.S. mobile home communities in the country. Equity Lifestyle is also Zell’s best performing REIT in recent years, increasing in value from just over $40 per share in 2015 to a current 52-week high of $128.43 per share.

Like their brick-and-mortar counterparts, senior mobile home communities often offer extensive amenities packages to attract residents. Some of the more common amenities include swimming pools, fitness centers, softball fields, and golf courses and boat docks at more upscale communities.

Some of the communities are keeping current on trends for amenities. Shuffleboard courts, once common and prevalent, are being repurposed in favor of other sports such as bocce and newer trends like pickleball. For those of you who don’t know, Pickle ball is an extremely popular form of tennis that is played on a much smaller court. It involves less running, but still requires great racket skills.

Supply and demand dynamics also favor the investor. Sun Communities has wait lists across its portfolio; its internal data revealed that the REIT accepted 50,000 applications for housing last year, for 5,000 available homes.

When seniors do eventually age out, they hold the values of their homes, as long as they’re well maintained.