Mobile Home Parks are Recession and Inflation Resistant
Welcome back to the Passive Mobile Home Park Investing Podcast, hosted by Andrew Keel. On this episode of the Passive Mobile Home Park Investing Podcast, Andrew talks about the #11 reason why you should start investing in trailer parks: mobile home parks are recession and inflation resistant. Mobile home park investing is a stable form of investment, even during times of recession and inflation. Between 2004 and 2018, operating income from mobile home parks rose by 87%, even during the great recession in 2008. Andrew further explains why the risks of investing in mobile home parks are not as scary as you might think.
Andrew Keel is the owner of Keel Team, LLC, a Top 100 Owner of Manufactured Housing Communities with over 1,300 lots under management. His team currently manages over 20 manufactured housing communities across nine states – AR, IA, IL, IN, MN, NE, OH, PA and TN. His expertise is in turning around under-managed manufactured housing communities by utilizing proven systems to maximize the occupancy while reducing operating costs. He specializes in bringing in homes to fill vacant lots, implementing utility bill back programs, and improving overall management and operating efficiencies, all of which significantly boost the asset value and net operating income of the communities.
Andrew has been featured on some of the Top Podcasts in the manufactured housing space, click here to listen to his most recent interviews: https://www.keelteam.com/podcast-links. In order to successfully implement his management strategy Andrew’s team usually moves on location during the first several months of ownership. Find out more about Andrew's story at AndrewKeel.com.
Would you like the pre-investment checklist that I use to review mobile home park deals before I invest in them? We are offering this as a free gift if you go to iTunes and leave a five-star review. To get the pre-investment checklist, leave us a five-star review on iTunes and then send us an email at email@example.com. In the email, please tell us who you are, what screen name you used to leave that review, and we’ll send the pre-investment checklist, directly to your inbox.
00:20 - Welcome back to the Passive Mobile Home Park Investing Podcast
00:35 – Reason number 11: recession and inflation resistant characteristics
00:53 - Why mobile home parks are recession resistant
02:03 - Operating income from mobile home parks
02:55 - In conclusion
03:27 - The pre-investment checklist
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Links & Mentions from This Episode:
Keel Team's official website: https://www.keelteam.com/
Andrew Keel's official website: https://www.andrewkeel.com/
Andrew Keel LinkedIn: https://www.linkedin.com/in/andrewkeel
Andrew Keel Facebook page: https://www.facebook.com/PassiveMHPin...
Andrew Keel Instagram page: https://www.instagram.com/passivemhpi...
Welcome to The Passive Mobile Home Park Investing Podcast with your host, Andrew Keel. This is the podcast where you can get the education you need to invest 100% passively in a highly profitable niche of mobile home parks.
Welcome to The Passive Mobile Home Park Investing Podcast. This is your host, Andrew Keel, and today, we dive into reason number 11 as to why you should invest in mobile home parks. Reason number 11 is because mobile home parks have recession-resistant and inflation resistant characteristics. Let me explain.
Mobile home parks provide uncorrelated returns, meaning they perform well in strong and weak economic environments. Since they are the most affordable source of housing, mobile home parks offer recession-resistant characteristics not found in multifamily or other asset classes. And given the demand for affordable housing is increasing with diminishing supply, this asset class is not dependent on the stock market or a strong economy to produce double-digit, risk-adjusted returns.
With the average lot rents in mobile home parks, near $300 a month, and apartment rents at or above $1200 a month, rental income has room to grow in excess of inflation annually while not being dependent upon any growth in GDP. If the economy gets stronger, home prices go up, making it harder for low wage workers to afford housing. If the economy takes a downturn, even more people need access to affordable housing. This means mobile homes tend to retain their value regardless of the current state of the economy.
Between 2004 and 2018, operating income from mobile home parks rose by 87%, and this is according to Green Street Advisors who is a global real estate research firm. What’s important to note is the income never declined even during the Great Recession in 2008.
In our current portfolio, our COVID-19 collections were above 95% every single month. Several tenants of ours are on fixed incomes like Social Security and SSI, and they never had an issue paying rent. Others that lost their jobs were put on unemployment, but we still got paid first, and I think this is primarily due to the fact that we are covering the core need of shelter for our residents.
In conclusion, mobile home parks offer recession-resistant and inflation-resistant attributes that will help diversify your portfolio and prepare it for a downturn in the economic cycle. Join us next week for our final episode in the series on why you should invest in mobile home parks. This will dive into why mobile home parks have one of the highest opportunities for net operating income growth. Thank you for tuning in.
Would you like the pre-investment checklist that I personally use to review mobile home park deals before I invest in them? We are offering this as a free gift to those of you who go to iTunes and leave our podcast a five-star review. To get the pre-investment checklist, leave us a five-star review on iTunes and then send us an email to firstname.lastname@example.org. In the email, please tell us who you are and what screen name you used to leave that review, and we will send out the pre-investment checklist directly to your inbox. It's that easy. Once again, that email address is email@example.com. Thanks again for tuning in.