In today’s investment environment, portfolios demand diversification, durability, and inflation protection. Real estate has long served this role, but within it, lot-leased manufactured housing communities (MHCs) offer distinct advantages. For family offices and RIAs in particular, they represent a compelling and often overlooked real estate alternative.

Manufactured Housing Communities in Focus

Real estate remains a core alternative asset class, offering low correlation to equities, inflation protection, and comparatively strong risk-adjusted returns. Within this sector, lot-leased MHCs stand apart. This land-lease model, in which residents own their homes but lease the underlying lots on which they’re built, delivers recurring, inflation-hedged income with lower turnover, minimal maintenance costs, and high occupancy. With growing demand from institutional buyers, this asset class is also experiencing rising liquidity.¹ Features such as these are among the reasons why MHCs attract interest from sophisticated investors.

Affordable Housing Demand

Lot-leased communities serve retirees, single-person households, workforce housing, and downsizing boomers, groups driving consistent demand. Single-person households now constitute 29% of all household types and are likely to surpass married with no children households.² Demographic forecasts indicate that a significant portion of the over 30 million Baby Boomers will either relocate, downsize, or exit homeownership within the coming decade.

As on-site housing costs soar, demand rises for manufactured housing with its lower cost. The average home price in Asheville, NC (~$484,000)³ contrasts sharply with manufactured homes averaging ~$120,000–$220,000.⁴ This represents an average household price to average household income ratio of 7:1 for a traditional home versus 2.64:1 for a manufactured home, more in line with single person household incomes.

Supply constraints add to this dynamic. Zoning restrictions, community opposition, and land-use barriers have sharply limited new MHC development, while affordability pressures and demographic trends continue to expand demand, supporting rent growth and occupancy stability. MHCs often have a high occupancy rate. A Q2 2025 industry report shows 94%+ occupancy, which, together with the development restrictions and demand growth, increases the need for more MHCs.⁵

Additional Benefits of Lot-Lease Manufactured Housing

• • Tenant Retention: Lot-leased MHCs exhibit exceptional resident “stickiness.” Homeowners rarely move their homes (too expensive logistically), and high occupancy/retention results in steady income with lower volatility than other asset classes.Low CapEx and High Margins: Unlike multifamily or retail properties, lot-leased investor owners avoid most maintenance and replacement expenses, as the homeowners maintain their own homes. This model produces higher NOI margins, often around 65%, and simplified operations, appealing to investors seeking predictability.⁶
  • Recession Resilience: Manufactured housing has proven more stable through downturns. Analysts note it is “less likely than other types of real estate to rise or fall depending on how many jobs are created or lost.” ⁷ Its affordability and resident longevity make MHCs a defensive asset class, outperforming more cyclical property types.
  • Inflation-Hedged Income and Credit Strength: Many MHC leases include CPI-linked or fixed-rent escalations, with recent same-property rent growth of 5–8%.⁸ Generating these rental payments for the land have minimal incremental cost; these annual increases in rental income flow directly to NOI, offering a strong inflation hedge. Delinquency rates remain exceptionally low, around 0.1%, for securitized MHC loans, underscoring the sector’s credit stability.⁹

Final Thoughts

For sophisticated investors, lot-leased manufactured housing blends institutional real estate fundamentals with superior tenant retention, low CapEx, inflation linkage, and strong operating margins. Supported by constrained supply, enduring demand, and increasing institutional interest, lot-lease MHCs warrant serious consideration as a core component of a diversified real estate alternative investment allocation. Aside from their attractive returns, MHCs also address a national housing shortage by expanding access to affordable homeownership and fostering community stability. For family offices and RIAs pursuing impact mandates, MHCs offer measurable social value alongside durable income.

¹ Partner Valuation Advisors
² Census Bureau
³ Zillow
⁴ Manufactured Housing
⁵ SkyView Advisors
⁶ Flagship Communities
⁷ Wealth Management
⁸ SkyView Advisors
⁹ Trepp