On the surface, MHPs may not look like the type of real estate you’d want to invest in, but when you look deeper, you’ll find several remarkable qualities that make them perfect for retirement portfolios. Here’s why investors love MHPs:
Demand for mobile homes has never been higher, as baby boomers retire and people of all ages seek out affordable housing. At the same time, supply is dwindling due to redevelopment, leading to even more demand.
Stable cash flow
A unique characteristic of MHPs is that residents own their own home, while they pay monthly rent for the lot their home sits on. As homeowners, residents have a vested interest in staying at the MHP and rarely move, resulting in low turnover and stable cash flow for investors.
During a recession, MHPs experience higher demand because they’re the most affordable housing option. This heightened interest, coupled with stable cash flow fuels MHPs’ strong performance through times of uncertainty, when most other real estate segments suffer. (For more information on why MHPs are recession resistant, see this article.)
MHP performance is not correlated with the stock market, the economy in general, or the broader real estate market. When everything else is in chaos, MHPs can offer the most predictable cash flow with the least amount of volatility.
Whether the market is booming or busting, MHPs can deliver more stable returns with less risk than traditional investments and other types of real estate. That’s why they are such a good fit for SDIRAs.