Why do people live in mobile homes parks? In this first part of our 5-part series on Lessons Learned from our Residents, we're going to discuss the reasons that 8% of Americans choose to live in mobile homes, and what the key drivers are for them in making that selection. We have roughly 90,000 residents living in our properties -- and we've been renting lots and selling homes for over two decades - so this is a topic that we are intensely interested in. Hear what we've learned about why customers choose mobile home parks to live in, based on our past experiences
Why would someone want to live in a trailer park? We're going to discuss that topic as part of our five part series on lessons learned from our residents. This is Frank Rolfe with Mobile Home Park Mastery. It drives us crazy when people always say, "I can't imagine why anyone would want to live in that mobile home park." Because there's a lot of reasons why people want to live in mobile home parks.
Let me go over the top 10 reasons why. The first, they enjoy the privacy. They like having a living situation without people knocking on their wall and ceilings. Without people constantly pressed up against them. They like the simple privacy as we all do of detached housing. And it's certainly is a very driving force when your only other housing option at the price point of which mobile home parks charge are apartments, in typically Class B, Class C apartments.
The second reason is they like the convenience of being able to park by their front door. It may not sound like a lot to you because you probably already park by your front door, but for folks living in apartment complexes they have to park far away. They have to then walk in the rain, snow, whatever the weather may be, burning hot, fairly long distances from that parking lot over to their apartment, and they, frankly, just don't enjoy it. How would you like to lug lots of sacks of groceries 50 yards or sometimes 100 yards from the parking lot over to your home? Again, they really enjoy that convenience factor.
Number three, they really enjoy having a yard. Who doesn't? A yard gives you not only that sense of privacy, but that additional living space. An outdoor living space where you can have outdoor furniture or barbecue grill. And if you have a pet, it gives you a place for the pet to run around. Clearly, having a yard is a huge driving force for why you'd want to live in a mobile home park over an apartment.
Next, the simple fact of being a homeowner. It's the American dream to own your own home. Those who live in apartments never have the dream. Those that live in mobile home parks typically always have that dream. They own the property. They can do with it as they like. They can paint it whatever color they want to paint it. They can knock out that cabinet. They can knock out that wall. Make any alterations they want. They always have that stable base of knowing they own the home and it will always be theirs. Being a homeowner is again a huge part of why people would like to live in a mobile home park.
Number five, the sense of community. The Time magazine article called, The Home of the Future, which raved about the sense of communities in mobile home parks was completely on track. They called them the gated communities of the less affluent. Well, I don't know if that's actually accurate, because a lot of folks living in mobile home parks are not the less affluent. Contrary to the stereotype that mobile home parks commonly receive. Nevertheless, the article was very, very true.
My partner, Dave Reynolds, lived in several of the mobile home parks that he owned. One that he lived in down in Hondo, Texas he was really impressed by the sense of community of what he found. He found people who were ride sharing long before the invention of Uber. He found people that were sharing all kinds of tasks and skills freely amongst each other to help each other. You needed childcare, they had you covered. You needed meals, but you couldn't get them because you were disabled or elderly, no problem. They would go and get them, make them, and bring them to you. Really it was a sense of community that was stronger than probably any place you'll find on earth. You could move into that mobile home park as a single mother with very, very limited ability financially and transportation challenged, and they would basically take care of you.
It was a great supportive environment and, again, that's a huge item you get with virtually with every mobile home park is that unique sense of community, sense of belonging, something like you belong to a club and everyone takes care of you. There's an old and very poor taste comment, it's a t-shirt that says, mess with me and you mess with the whole trailer park. But that's not entirely untrue. Many people feel real sense of bond with those who live around them just the same as you do in your neighborhood. And that sense of community is a very strong force. You never have that in an apartment complex ever.
Number six, being able to afford their housing. It's not talked about enough in America, but we're not doing that well financially. 70% of all Americans do not even have $1,000.00 in savings. This is not really just an issue for those who really need affordable housing. It's true really 70% of Americans, they simply cannot afford where they're living. Now, for the lucky few who end up in mobile home parks, one of the great strengths of that decision is they can now afford to live where they live, and that's a very reassuring feeling. Typically, in our country it's considered that you should not spend more than 30% or 33% of your income on housing. If you are earning $10.00 and hour, that gives you a budget of only about $500.00 to $600.00 a month to spend.
Now, the good news is there is a way you can do that in a mobile home park. But the bad news is there's virtually no where else you can. The average apartment rent in America right now is running about $1,200.00 a month. The median single family is almost $200,000.00. Our traditional forms of housing, apartments, and stick build, simply are not affordable. Not even close. Those folks living in apartments who are unable to pay the normal rent ... Well, they're subsidized by the US Government through Section 8. But, is that really working for them? Probably not. Surely you'd be a little afraid of the program itself. The US Government can hardly afford to maintain the Section 8 program. Someone was interviewed on HUD on that same piece of National Geographic that I appeared on and he admitted they had to turn away about two thirds of all applicants because they simply do not have enough funding. If you want the peace of mind of truly affording where you li ve, the only option for millions of Americans is, in fact, the mobile home park.
And on that same note, item seven, what they really like about the mobile home park is not only being able to afford it, but also to be getting a really terrific bargain. It's one thing to be affordable housing, it's a whole other thing to be getting an unbelievable value. The typical lot rent, the average lot rent in the US right now is running about $280.00 a month. It's nearly $1,000.00 a month under apartment rents. And if you own your mobile home outright, which probably 80% of all mobile home park residents do, you're only paying the lot rent. You're not paying the lot rent plus the mortgage on the home. When you pay the lot rent and the mortgage, in most markets you're talking a price point of $600.00, maybe even $700.00 a month. While that still may be affordable for many people, it's unbelievably attractive when you finally make that last payment and only owe the lot rent of roughly $280.00 a month. That's another big driving force for people i s not only do they get everything I mentioned so far at a price they can afford, but once they get their mortgage paid off, and it might be in five years, seven years, ten years, fifteen years, they get the best bargain in all of housing.
In Austin, for example, you'll find a typical lot rent normally of about $400.00 to $500.00 a month, but the average three bedroom apartment rent is $1,500.00 a month. There seems to always be that $1,000.00 spread between apartments and mobile home park lot rents. That is a very, very significant amount of money, particularly if you're earning roughly in that $10.00 an hour level or so.
Number eight, they love low utility costs. We all like micro housing. It's a huge trend right now in America to like those small homes that you see on HGTV. If you watch the show, a lot of people are segued over into that sector because of the low utility costs. You have a very small footprint, very small floor plan. A lot of Americans might say, "Well, gosh, I like things really big." Well, that's fine. You have the freedom to buy really big, but others out there don't want really big. They want to have a smaller dwelling that they feel confident with that they can cover the cost on and they like those low utility costs. Basically, as I think we all know, utility costs often are just a function of square footage. As you go down the square footage chain, your overall utility cost decline. And many, many people favor living in mobile home parks and mobile homes because utility costs are much, much lower than other forms of housing.
Number nine, they also like low maintenance cost. Mobile homes are kind of unique in the way that they're built. If you've never been to a factory, I welcome you to go to one. The one in Elkhart, Indiana the one that Clayton owns, they'd be more than happy to give you a tour. What you'll find is the way that mobile homes are constructed makes them very, very easy to maintain. All of your utilities, your water, your sewer, your air duct ... it falls in one central canal in the middle of the home, which is very accessible from underneath. Unlike your house, which is probably built on the slab or pier and beam. These are not. These are homes built on a frame, on a chassis with wheels on it. You can access all of that duct work and piping extremely easily from underneath. You can literally just crawl under the house and make repairs. It's nothing like what you have to deal with in typical single family home. Additionally, your wiring is relatively simplisti c, and not that, again, hard to access. Really all of the typical features of a stick built that would make it very, very expensive are not there on a mobile home.
Overall, not only is the home very inexpensive to start with and very inexpensive to maintain, but equally interesting is the fact that it doesn't cost much to maintain it. Let me give you a rough idea. Look at the roof on your stick built house. If you have to go out there and replace the roof, what are you looking at? $5,000.00? $10,000.00? Maybe more? In a mobile home traditionally, if you have to go out and re-roll that metal roof with sealant, and metal roofs are definitely the most prevalent form of roofing in the industry, you're looking at a total charge of about $250.00. That's all. You get a five gallon bucket of a rubberized compound and a paint roller, you get up on a ladder and you can have that entire mobile home roof redone in the span of a couple hours. Now, compare that to the cost on your house. Good luck on that.
Let's say that your home is starting to settle and is no longer flat and level. What would that cost on your house? Ram jack foundation and a $10,000.00 cost. On a mobile home, you're talking a couple hundred dollars to have the home re-leveled. Once again, the mobile home is a much, much less costly thing to maintain. Let's say you want to paint the exterior of your home? What are you talking there? $3,000.00. $4,000.00. Typical mobile home to repaint the entire exterior of your choice is roughly around $500.00.
In every category up and down the line, the mobile home definitely at all time trumps the single family home as far as cost of maintenance. And when you don't have a lot of money to begin and you're trying to live affordably, it's very reassuring to know that virtually anything that happens you can cover.
The final reason, number 10, is that mobile home park people do not have to worry about the risk of price volatility in housing itself. For many homeowners in the stick built world, they're constantly concerned about the value of their home. Has it gone up? Has it gone down? Will my mortgage come due and I will get an appraisal and the home isn't worth as much as what I paid for it? However, in the mobile home park sector this never happens. Why is that? Because people don't look to the home for appreciation. If you buy a mobile home for $5,000.00, which is probably what most of your 1980s, and 70s, and 60s homes sell for throughout most of America, you're not buying that $5,000.00 thinking, gosh, I wonder if it will rise to six or ten or fifteen or twenty? You don't make your money on the price appreciation portion. What you make your money on is the price savings portion.
It drove me crazy when on one show I was on once, they brought on a goofy economist who said that mobile homes were a stupid idea for people because they just don't appreciate. What I guess the guy wasn't listening to was the fact that those people were saving $1,000.00 a month living in that mobile home. They were chalking up $12,000.00 a year every year that they live there. If they live there five years, they save $60,000.00. They were beating the single family people whose homes weren't appreciating by $12,000.00 a year and they had no risk in doing it. It was already money in the bank. It was already a done deal. Sure, mobile homes don't typically appreciate. In some states they do, Florida, California. I just toured recently a mobile home park in California where the mobile homes sell for $300,000.00. We all know about the park in Malibu where they sell for $400,000.00 and more. But, that's maybe not the whole picture. Sometimes, in the rest of Am erica outside of celebrity owned mobile home parks, you'll find that people are saving money every day and putting that in the bank, putting that to better uses. They don't have to worry about ... Are homes going up? Are homes going down in value? Because it doesn't matter in the least. They've already banked the savings.
Again, those are 10 reasons. There's surely more than that. But those are the top 10 reasons why people live in mobile home parks. This is a first of a five part series we're going to do on lessons learned from our residents. Coming up next, we're going to talk about how people choose the mobile home park that they live in. This is Frank Rolfe, the Mobile Home Park Mastery. We'll talk to you again soon.