If there's any industry that's properly positioned for America's megatrends, it's the mobile home park industry.
A "megatrend" is a term coined by Jon Naisbitt back in the 1980s. It means there are forces in the world so powerful that you don't dare bet against them. You want to be swimming with the current, not fighting it.
And out of sheer luck, a little creativity, and some smart strategy, mobile home parks have landed right in the sweet spot of every single one.
Housing prices are around $400,000 for a single-family home. Average apartment rents are around $2,000 a month. Most Americans simply cannot afford to live in America anymore, and that makes the demand for affordable housing enormous. After COVID, Americans realized they don't want to be cooped up in apartments. They want detached housing. They're fleeing the coasts for the Midwest and Great Plains. They're moving from urban cores to suburbs and exurbs. Baby boomers are retiring and downsizing by the thousands per day. Blue collar “essential” workers need places to live. And technology, which has gutted offices, shopping malls, and hotels, can't touch housing. You can't sleep on Zoom.
Every single one of these megatrends are favorable for mobile home park owners. Not some of them. All of them.
That's not something you can say about any other real estate sector in America today.
I put together a video walking through each of these megatrends and what they mean for your investment future.
Every Mega Trend In America Is Pointing Straight At Mobile Home Parks - Transcript
This is Frank Rolfe with mhu.com. You know, if there's any industry that's properly positioned for America's megatrends, it's the mobile home park industry. Now, megatrend is a term coined by John Naisbitt back in the 1980s. And what it means is there are some things in the world, some forces that are so strong that you don't dare be in opposition to them. You want to be in the flow with that megatrend. And out of sheer luck and a little creativity and a little bit of strategy, the mobile home park industry just happened to fall right into the sweet spot in every American megatrend. So let's just go through them real quick. Number one, the demand for affordable housing. American housing prices are way too high, at least way too high for what the consumers can afford. At a $400,000 single family home price point and a 2000 a month average US apartment rent, most Americans cannot afford to live in America. So that makes the demand for affordable housing extremely strong, which is exactly the megatrend that fuels mobile home parks to do so well today. And then you have the demand for detached housing.
We found this from the COVID crisis back in 2020. People grew disenchanted of being cooped up in their apartments with no yards and not a lot of space. And suddenly Americans all across the country realize, hey, I don't want to live in attached dwellings anymore. I want to live in detached dwellings. Once again, mobile home parks are right in the sweet spot, as we have always been the alternative that offers a detached housing option to those who can only afford apartments. Also, another megatrend is the move of Americans today from the urban centers to suburbs and exurbs. Those are the areas that you drive in your car away from your job to get to. Why do people like to drive farther away today? Well, we learned during COVID again that we like the out of doors, we like our privacy, we like our space. But also because of home prices, we've realized if we push farther out, we'll get a better deal. The good news for mobile home park owners is that mobile home parks are almost exclusively in suburbs and exurbs. There are almost no mobile home parks in city urban cores. Once again, the megatrend completely favorable for mobile home parks.
Then you have the megatrend of either stagflation or recession. We don't know which we're going to have. It may be a depression. It's probably going to fall in 2025. We typically in America have had recessions every seven to 10 years, but we haven't had one now in about 15. So as a result, we just know there's one on the horizon. We just don't know when. And mobile home parks are contrarian. They do very, very good in times of recession. Depressions, recessions, stagflation, that's all good for park owners. So we welcome that megatrend. Then you have baby boomer retirements. The baby boomer generation are those born between 1946 and 1964. Hey, I'm a baby boomer. And what do we see around us? We see baby boomers reaching that coveted retirement age of 62 or 65 or 67. And what do they do? Well, they quit their work and they decide to downsize and sell their old brick home and put that money in the bank. And it's this whole idea of downsizing that has created once again, huge demand for mobile home parks. Because many seniors will not move into an attached dwelling. They demand a detached dwelling.
And once again, mobile home parks are exactly on the right side of that megatrend. Then you have the fact that there is more demand today than ever before for people who work in blue collar professions. Once again, during COVID we learned the difference between essential workers and non-essential. And we all learned that mobile home park workers are all essential. They do the job functions that make America work. They produce food, they produce trucking and shipping and products. So when we have a recession, the industries that will not be impacted, the ones that create our basic necessities, those will, as always, flourish. And once again, that's where the bulk of all mobile home park resident employment lies. In fact, it's thought that the number one job in mobile home parks in America today is the fast food industry, which once again is essential work. So again, a great megatrend for park owners. Then we have the megatrend of people moving away from the coasts, from the west and the east coast. This is a very, very good megatrend for those of us who own mobile home parks and all the rest of America. So every time I read about people fleeing California to move to the east or fleeing New York to move to the west, well, I'm definitely heartened because our portfolio is in the great plains in the midwest, and that's where the bulk of the 44,000 parks in America are.
So once again, that megatrend is good. Also, we're seeing a lot of issues in America today with technology. The Internet has ruined so many businesses and so many real estate sectors. If you think back to when we all used offices, I used to be someone who had to have an office because I had to have a place where I could have a receptionist answer the phone. And today you don't need it because your whole office can be run off of your cell phone. You can collect in your email, you can go ahead and meet people on Zoom and FaceTime. And if somebody calls, you don't need a receptionist today, it just goes to your voicemail or maybe someone texts you. And that's why office occupancy and rents have plummeted. The same with shopping malls, because we all buy products today on Amazon and eBay and places like that. So once again, it doesn't matter at all the need for a shopping center or any kind of brick and mortar store, because no one buys things like that anymore. And the lodging industry is permanently disabled because people today, they don't have to have expensive business conferences to get together and talk.
They can do it right there on Zoom. The bottom line is the technology has been able to impact, in a positive or negative way, but mostly negative, the real estate industry, but not mobile home parks. Because once again, we are all about housing. And when you're in the housing business, you can't do that off of Zoom. You can't do it out of the cloud. You got to have a place with a bed and a chair and a dresser with a roof over it. And once again, mobile home parks are exactly in the right spot. The bottom line is, if you lay out on a sheet of paper every megatrend going on in America today, you'll see, without exception, each and every one is very favorable for the mobile home park industry. And that's why investing in this industry is so, so great. Such a positive step, is because you are perfectly aligned with every big phenomenon that will impact all of our investment futures as far as the eye can see. This is Frank Rolfe with mhu.com. Hope you enjoyed this and talk to you again soon.