Beyond the Chassis: Why Mobile Home Parks Are a Land Business

There is a persistent misconception in the real estate world that owning a mobile home park means being in the “mobile home” business. To the uninitiated, the image that comes to mind is one of managing a fleet of aging vehicles or dealing with the maintenance of dozens of individual housing units. However, seasoned investors and industry experts understand a fundamental truth: a mobile home park is a land-based infrastructure business.

The distinction is not merely semantic; it defines the risk profile, the operational requirements, and the long-term value proposition of the asset. In a well-structured mobile home park, the owner does not own the homes; they own the ground beneath them and the infrastructure that makes the ground habitable.

The “Horizontal Apartment” Model

The most efficient mobile home parks operate on a Tenant-Owned Home (TOH) model. In this scenario, the park owner acts as a ground lessor. While a traditional apartment owner provides both the land and the structure (the “vertical” model), a mobile home park owner provides only the “horizontal” components.

“The mobile home park business is the only real estate asset class where the tenant owns the most depreciable part of the asset—the home—while the landlord owns the most appreciative part—the land.”

By shifting the ownership of the structure to the tenant, the park owner eliminates the most volatile expenses associated with residential real estate: interior maintenance, appliance repairs, and roof replacements. The owner’s responsibility is limited to the infrastructure, which includes:

•Utility lines (water, sewer, electric, and gas).

•Roads and common area lighting.

•Landscaping and drainage systems.

•On-site amenities like clubhouses or playgrounds.

The Economic Moat of Land Scarcity

One of the primary reasons mobile home parks are a land business is the extreme scarcity of the asset class. Due to restrictive zoning laws and “Not In My Backyard” (NIMBY) sentiment, it is nearly impossible to develop new mobile home parks in most jurisdictions today. This creates a natural monopoly for existing landowners.

Because the supply of land permitted for manufactured housing is shrinking while the demand for affordable housing is surging, the value of the land itself increases. Unlike a mobile home, which is a depreciating piece of personal property, the land and its entitlements are the true drivers of wealth in this industry.

Operational Stability and Tenant Retention

In the housing business, turnover is a major expense. In the land business of mobile home parks, turnover is remarkably low. This is due to the high cost of moving a manufactured home. It can cost between $5,000 and $10,000 to relocate a single-wide home, making it economically unfeasible for most residents to move their “walls” once they are set.

This “captive” nature of the land lease provides a level of cash flow stability that is rarely seen in other real estate sectors. The table below compares the fundamental differences between the two perspectives:

Feature	The “Mobile Home” Perspective (Incorrect)	The “Land Business” Perspective (Correct)
Primary Asset	Depreciating vehicles/structures	Appreciating land and infrastructure
Maintenance	Toilets, sinks, and paint	Roads, pipes, and wires
Depreciation	Standard residential (27.5 years)	Land improvements (often 15 years)
Tenant Relationship	Short-term residential tenant	Long-term ground leaseholder
Value Driver	Condition of the individual units	Zoning, entitlements, and lot rent

Tax Advantages and Infrastructure Depreciation

From a fiscal standpoint, the land business offers unique advantages. While land itself does not depreciate, the land improvements—the roads, utility lines, and pads—often qualify for accelerated depreciation. Under current tax codes, many of these infrastructure components can be depreciated over a 15-year schedule, providing a significant shield for the park’s cash flow.

Furthermore, because the owner is not managing individual housing units, the expense ratio of a land-based park is typically much lower than that of a traditional apartment complex. A well-run park might see expenses as low as 30% to 40% of gross income, whereas apartments often hover around 50%.

Conclusion

Owning a mobile home park is a strategic play on land use and infrastructure management. By providing the foundation upon which others build their lives, the park owner secures a position in the most stable segment of the affordable housing market. You are not in the business of fixing trailers; you are in the business of leasing the most valuable and scarce resource in real estate: permitted, improved land.

In the final analysis, the “mobile” in mobile home is a misnomer for the investor. The home stays, but the land—and its value—grows.