Multi-Family: Forgotten Segment Of Commercial Real Estate Market

Published in The Ledger's Polk Homes Magazine June 12, 2010, page 31

by Gregory S. Smith, Realtor®, Coldwell Banker Commercial Saunders Real Estate

“In today’s tough economic climate, affordable housing is as important as ever. No age bracket or social class has been exempted from the housing meltdown and the need for affordable housing is only growing”

As a professional real estate broker, primarily focusing my practice in the area of manufactured home parks, the one thing I have come to learn is that affordable housing is a growing necessity in our society. The banking and housing crisis we have found ourselves in has resulted in large numbers of people losing their homes even though their need for housing still exists. That being said, people are being forced to re-evaluate their budgets and are nding less money available for their housing expense.

Enter the manufactured home market. For too long, tenants, buyers and investors have viewed manufactured home parks as run down, low income, trailer trash developments. Although there are some of those that exist, I’ve found that there are many more developments that are very neat and well maintained, full of amenities such as swimming pools, shuffleboard courts, walking trails and many more activities.

The other stigma attached to manufactured home parks is that they are not very well built or safe. I have also found this to be much less of a concern today. After Hurricane Andrew devastated Florida in 2002, signi fcant changes were made to the US Federal Manufactured Home Construction and Safety Standards. These standards were put to test during the 2004 hurricane season. There were several major hurricanes exceeding 115mhp. In the aftermath, the homes built using the new construction standards fared quite well.

Affordable housing is in demand now and is only going to grow. The median price of a new, conventionally built home in 2008 was $217,000. With a 10% down payment ($21,000) this would give a buyer a monthly payment for 30 years of $1175. The median price of
a new manufactured home in 2008 was $33,500. For not much more than a down payment on a new, conventionally built home, you could own a new manufactured home outright. With an average fee of $300 per month, someone can put their manufactured home in a well maintained, gated development where streets, lawn care and other amenities are taken care of by the development owner.

Prudent investors are becoming increasingly aware of the bene ts that manufactured home communities can provide. There are several different types of communities that exist. Mixed communities consist of families with children who usually rent the manufactured home and lot.

There are 55+ communities for retired people with no children at home and a desire a for a maintenance free environment with lots of activities. There are communities where the development owns and rents the homes. There are other communities where the tenant owns their own home and rents just the lot space. All in all, there is a manufactured home community that suits every affordable housing need and there are manufactured home communities that t the needs of multi-family income property investors.

About the Author:
Gregory S. Smith, Realtor®, is with Coldwell Banker Commercial Saunders Real Estate in Lakeland, Florida. Contact him at 863-648-1528 or greg@saundersrealestate.com