Manufactured housing communities (MHCs) combine cap rates near 6.5% with turnover costs a fraction of apartment resets, which is why they hold income through economic contractions. This asset class rewards investors who value stability over speculation.

Cap Rate Trends Through 2026

Average MHC cap rates have compressed from roughly 7.5% in 2019 to a range near 6.0% to 6.5% today. That movement reflects sustained buyer demand for parks with stabilized lot rent and long tenant tenure. Two forces drive the trend.

  • Constrained supply. Local zoning rarely permits new communities, so existing parks face limited competition.
  • Sticky occupancy. The cost for a resident to relocate a home often exceeds 5,000 dollars, which keeps physical occupancy high.

Why MHCs Outperform When Markets Soften

Three structural features explain the resilience of this asset class during downturns.

1. Residents own the homes

Operators typically own the land and lease lots. Because residents own their homes, they have strong incentive to stay, and turnover stays measured in years rather than months.

2. Lower operating drag

Landowners maintain roads, utilities, and common areas, not individual structures. That keeps operating expense ratios below those of comparable multifamily assets.

3. Demand grows when budgets tighten

Lot rent generally runs well under the cost of comparable apartment rent in the same market. When household budgets contract, affordable housing demand rises rather than falls.

Occupancy that holds through a recession is the difference between an asset that funds distributions and one that draws them down.

How This Shapes Investor Positioning

For investors weighing where to allocate, MHCs offer income durability that many property types cannot match. Our fund targets a 10% return, framed as a target and not a guarantee, built on a portfolio of stabilized and value-add communities. You can review the strategy and current holdings on the fund overview page.

  1. Prioritize parks with public utility hookups over private systems.
  2. Confirm lot rent sits below the local apartment average.
  3. Weight physical occupancy history across the last full cycle.

Review the fund thesis and allocation details on our investor page to see whether manufactured housing fits your portfolio.