Monday, January 09, 2023

RENTIER CAPITALI$M
Corporate landlords are snatching up mobile home parks and jacking up the rent — here’s why such cheap properties are so appealing to wealthy investors


Vishesh Raisinghani
Mon, January 9, 2023

WHEN THEY GET DESTROYED BY TORNADOES
THE RENTIERS COLLECT ON INSURANCE

Corporate landlords are snatching up mobile home parks and jacking up the rent — 

The hunt for yield has pushed private equity firms and professional investors into new segments of the real estate market.

In recent years, sophisticated investors have snapped up multi-family units and single-family homes. Now, corporate landlords are targeting the most cost-effective segment of the real estate market: mobile home parks.

Americans are paying nearly 40% more for home insurance compared to 12 years ago — here's how to spend less on peace of mind

'Hold onto your money': Jeff Bezos says you might want to rethink buying a 'new automobile, refrigerator, or whatever' — here are 3 better recession-proof buys

The most affordable U.S. housing option

Manufactured homes or mobile homes are considered the most affordable non-subsidized housing option in America. That’s because the owners own only the prefabricated unit and not the land under the home. The land is usually leased from the landlord of a trailer park.

The average monthly rent for a mobile home in 2021 was $593. That’s significantly lower than the average one-bedroom condo rental rate of $1,450. The mobile park rental also often includes utilities and insurance.

Rents typically rise 4% to 6% annually, and renters have the flexibility to move their housing unit to another park. These factors make the manufactured home highly attractive to low-income households.

As of 2020, nearly 22 million Americans lived in mobile homes. That’s 6.7% of the total population, or about one in 15 people across the country.

However, the economic inefficiencies that make these manufactured homes affordable also make them attractive to professional investors.

Investing in mobile home parks


Factors such as below-market rents and disrepair make mobile home parks attractive for investors seeking to add value. The typical mobile home park lot costs $10,000, which means 80 lots would be worth $800,000 on average.

Put simply, the entry price for these parks is much lower than multi-family apartments and condo buildings across the country.

Professional investors can also raise rents significantly to improve the valuation of the property. Attracting tenants with higher incomes or improving the park’s amenities and infrastructure are other value-add strategies that make this asset class appealing.


The fact that moving a typical mobile home costs between $3,000 to $10,000 also means that most tenants are unable to afford the move. This gives landlords immense pricing power.

Meanwhile, the yield is much higher. The capitalization rate (the ratio of net operating income to market price) could be as high as 9%, according to real estate partners Dave Reynolds and Frank Rolfe, who together are the fifth-largest owner of mobile home parks in the U.S.


The largest mobile park landlord is real estate veteran Sam Zell. Zell’s Equity LifeStyle Properties (ELS) owns 165,000 units across the country, and the asset is a key element of his $5.2 billion fortune.

In recent years, larger investors such as Singapore’s sovereign wealth fund GIC and private equity firms such as The Carlyle Group, Brookfield, Blackstone and Apollo have also added exposure to this asset class.

Even Warren Buffett is involved. His firm’s subsidiary, Clayton Homes, is the largest manufacturer of mobile homes in the U.S., and also operates two of the biggest mobile home lenders, 21st Mortgage Corp. and Vanderbilt Mortgage.

You can invest, too

Retail investors looking for exposure to mobile home parks have plenty of options.

Acquiring a park is, perhaps, the most straightforward way to access this asset class. However, publicly listed stocks and real estate investment trusts offer exposure, too.

Sam Zell’s Equity LifeStyle Properties is listed on the New York Stock Exchange under the ticker ELS. Sun Communities Inc. (SUI) owns 146,000 units across the U.S. and some in Canada, while Legacy Housing Corp. (LEGH) builds, sells and finances manufactured homes.

Plus, mobile homes aren't the only accessible option for someone eager to get into commercial real estate.

With the help of new platforms, retail investors — not just the ultra rich — can buy shares of institutional-quality properties.

Prime commercial real estate has outperformed the S&P 500 over a 25-year period. Now, with a single investment, investors can own properties leased by brands like CVS, Kroger and Walmart — and collect stable grocery store-anchored income on a quarterly basis.

https://www.versobooks.com/books/4030-rentier-capitalism

Brett Christophers styles this as “rentier capitalism,” in which ownership of key types of scarce assets—land, intellectual property, natural resources, ...

https://www.youtube.com/watch?v=4mASPcIZvQg

Jan 23, 2018 ... Is the financialized economy betraying those with "real" jobs? Get ahead of the trends shaping "rentier" capitalism and learn about how it ...

http://www.grahamscambler.com/an-ideal-type-of-rentier-capitalism

May 15, 2021 ... ... new book Rentier Capitalism: Who Owns the Economy and Who Pays for It?, which incidentally I highly recommend. I'm not an economist, ...

https://journals.sagepub.com/doi/full/10.1177/0308518X211062233

Dec 6, 2021 ... Indeed, Christophers' analysis of rentier capitalism is largely confined to the ... De Angelis M (2001) Marx and primitive accumulation: The ...

https://progressiveeconomyforum.com/glossary/rentier-capitalism

Rentier capitalism is a term currently used to describe the belief in economic practices of monopolization of access to any kind of property (physical, ...

https://pop-umbrella.s3.amazonaws.com/uploads/99e023db-9f48-4a15-aa48-3db6e480b1cb_65e90c9c-b8f1-4102-a3cc-5ca096087a54_DebtBriefOne_26-11-2019_5_.pdf

Rentier capitalism and debt: why workers should be concerned ... form of rentier capitalism. This is a sys- ... Dao, M. C., Das, M., Koczan, Z., & Lian, W.

https://www.theguardian.com/commentisfree/2020/aug/12/ppe-britain-rentier-capitalism-assets-uk-economy

Aug 12, 2020 ... Rentier capitalism is an economic order organised around income-generating assets, in which overall incomes are dominated by rents and economic ...

https://www.theguardian.com/commentisfree/2022/may/30/age-of-inflation-economy-rentier-capitalism

May 30, 2022 ... In his book Rentier Capitalism, the social and economic geographer Brett Christophers has shown that the central effect of Thatcherite ...

https://www.moralmarkets.org/book/rentier-capitalism-who-owns-the-economy-and-who-pays-for-it-2020

Nov 24, 2020 ... Brett Christophers styles this as 'rentier capitalism', ... Assets can be intangible as well as tangible of course, but I'm not entirely ...



No comments: