Mobile home park cap rates have compressed steadily over the past decade as institutional capital discovered the asset class. But the range between the best and worst-priced deals remains wider than most property types, creating opportunity for investors who understand what drives MHP valuations.

Current Cap Rate Ranges

As of Q1 2026, mobile home park transactions are pricing across a wide spectrum:

  • Institutional-quality parks (100+ lots, metro locations, full infrastructure): 5.5-6.5% cap rates. These are professionally managed communities in strong MSAs with stable occupancy above 95% and lot rents at or near market.
  • Mid-market parks (50-100 lots, secondary markets, solid fundamentals): 6.5-8.0% cap rates. This is the sweet spot for value-add investors. Parks often have below-market rents, some deferred maintenance, and room for operational improvement.
  • Smaller or rural parks (under 50 lots, tertiary markets): 8.0-10.0%+ cap rates. Higher yields reflect lower liquidity, limited financing options, and higher operational intensity.

What Drives Cap Rate Compression

Several structural factors continue to push MHP cap rates lower:

Supply constraints: Net new mobile home park development is near zero. Zoning restrictions effectively prevent new communities from being built in most markets. When supply cannot grow, existing assets become more valuable.

Affordable housing demand: With median home prices exceeding $400,000 nationally and apartment rents consuming 30%+ of median household income in most metros, manufactured housing represents one of the last truly affordable housing options. This demand floor supports occupancy and rent growth.

Institutional adoption: Large private equity firms and REITs have been active MHP acquirers since 2015, bringing institutional capital and pricing discipline to a previously fragmented market. Their presence validates the asset class but also increases competition for high-quality parks.

Where the Opportunities Are

The most attractive risk-adjusted returns in manufactured housing today are in the mid-market segment: parks with 50-100 lots in secondary markets where lot rents are 20-40% below comparable communities. These parks are too small for the largest institutional buyers but large enough to support professional management and efficient operations.

The value-add playbook is well-established: acquire at a 7-8% cap rate, implement operational improvements over 12-18 months, and stabilize at a 6-7% cap rate on significantly higher NOI. The combination of NOI growth and cap rate compression can produce total returns that are difficult to achieve in other property types.

Financing Considerations

Cap rate analysis must account for financing costs. At current bridge loan rates of 9.5-11% for MHP acquisitions, investors need to be confident in their ability to stabilize the asset and refinance into permanent financing (agency debt at 5.5-7%) within 12-18 months. The spread between going-in cap rate and bridge loan rate will be negative during the value-add period, which means the business plan and exit must be executed on schedule.

Requity Lending provides bridge financing specifically structured for manufactured housing acquisitions, with terms designed around the MHP stabilization timeline. Requity Group also invests directly in manufactured housing communities through our fund platform.