A 62-Lot Manufactured Housing Park Deal: How the Numbers Underwrite in 2026

Two numbers are worth sitting with before we open the deal. Total sales activity for manufactured housing communities in the first half of 2026 outperformed the same period in 2024 by an estimated 66 percent (author's estimate). Cap rates are averaging about 5.9 percent year to date (author's estimate), down from 6.3 percent at the close of 2024. Median price per space has climbed roughly 12 percent to about $58,400 (author's estimate). Occupancy across the national manufactured housing stock held at 94.9 percent in Q2 2025 — the latest read available — 10 basis points above the prior year.

That is the headline version. The version that matters for independent owners is what those numbers look like when they pass through the underwriting model on a specific deal. That is what today's brief does.

1. How a Manufactured Housing Park Underwrites Differently from Apartment Buildings

Before we open the deal, the frame matters. Manufactured housing communities — parks with land that is owned by the operator and rented to residents who own their own homes — underwrite on a different logic than conventional multifamily. In a duplex or a 12-unit apartment building, you are buying the right to set rents on someone else's housing unit. In a manufactured housing community, you are buying the right to charge lot rent to residents who own their structures outright. The residents carry their own insurance, maintain their own homes, and bear the depreciation cost on their own assets. Your exposure is the land and the infrastructure under it.

This distinction sounds small and is not. Lot rent in a manufactured housing community moves differently than apartment rents in three ways that reshape the underwriting entirely.

First, lot rent growth is not constrained by the landlord-tenant rent control apparatus that governs apartment rents in most jurisdictions. Lot rent increases in most states require 30 to 90 days written notice; they are not subject to rent stabilization ordinances in the way that apartment rents are in California, New York, or Oregon. The practical ceiling on lot rent increases is resident affordability and the alternative cost of homeownership or apartment rental — not a regulatory cap. Asking rents in manufactured housing communities rose an estimated 7.0 percent year over year nationally to a $752 monthly average (author's estimate), with the steepest growth in the Southwest and West regions where affordability pressure on alternative housing is highest. That 7.0 percent is not a rent control number. It is a market number.

Second, the cost structure is different. A manufactured housing community operator does not pay for unit turn costs, appliance replacement, interior painting, carpet cleaning, or unit-level capital expenditure reserves at the rate an apartment operator does. The resident owns the home. The operator's capital expenditure is limited to infrastructure — roads, water and sewer laterals, electrical pedestals, landscaping in common areas, and the property management office. Operating expense ratios in well-run MHPs run 35 to 45 percent of gross income, where conventional apartment operating expense ratios in the same market often run 45 to 55 percent. The lower expense ratio compounds: a $200,000-gross-income MHP at 40 percent operating expenses produces $120,000 in net operating income against the same gross from a 52-percent-expense-ratio apartment building producing $96,000.

Third, the valuation is not driven by comparable sales in the way that single-family homes are. There are too few MHP transactions in any given market to generate reliable comp sets. MHP buyers underwrite to income: the valuation formula is net operating income divided by cap rate, just like a conventional apartment building, but the income is more defensible because lot rent increases are less regulated and the expense ratio is lower. The $58,400 median price per space (author's estimate) implies a per-space NOI at the national average cap rate of 5.9 percent of roughly $3,446 per space per year — or about $287 per month per space in net operating income. That is the income that a 62-space park generates before debt service.

2. The Deal: 62-Lot Manufactured Housing Community, Rural Tennessee

Here is the anatomy of a deal that fits the profile of what an independent owner with four to eight conventional rental units might realistically look at as a next acquisition. Not an institutional build-to-rent portfolio. Not a Sun Belt MHP with 300 spaces and a professional operator running it. A rural or exurban Tennessee park, 50 to 80 lots, mostly family-owned, with deferred maintenance and a lot-rent-to-market gap.

The deal profile:

62 occupied lots
Lot rent currently charged: $365 per month per lot (below-market; market rent in the $390-$425 range for the county)
Annual gross income: $271,440 ($365 times 62 lots times 12 months)
Annual operating expenses: estimated $97,500 (property taxes, insurance, water-sewer, electric pedestals, road maintenance, management at 5 percent of gross, reserves)
Net operating income: $173,940
Asking price: $2,899,000 (priced at a 5.9 percent cap rate, matching the national average estimate)
Implied per-space price: $46,758 (below the $58,400 national median estimate — this is a rural Tennessee park, not a coastal or suburban Southeastern park)

The deal was listed because the second-generation owner is retiring. The park is 85 percent occupied (53 of 62 lots have homes on them; 9 lots are vacant pads). Vacant pads are the upside: each vacant pad represents a potential $390 to $425 per month in new lot rent income. The park has water and sewer capacity for all 62 lots, a paved internal road network that is in fair condition (needs roughly $45,000 in overlay work within 24 months), and an on-site property manager who lives in one of the homes and handles day-to-day operations.

How the upside works

At 100 percent occupancy, the income would be $317,520 per year ($425 times 62 lots times 12). At a 5.9 percent cap rate, the fully-stabilized value would be $5,381,695. The gap between the asking price of $2,899,000 and the fully-stabilized value at $5.38 million is not a fair comparison — it reflects the occupancy discount that a below-market park with deferred maintenance sells at. But the income gap between 85 percent occupancy and 100 percent occupancy at current market lot rent is $46,080 per year. That income, at a 5.9 percent cap rate, adds $781,356 in value above the asking price — on paper. The actual value-add calculation requires subtracting the cost of filling those nine vacant pads: approximately $2,500 to $5,000 per pad for basic site preparation and utility connection, or $22,500 to $45,000 total. Fill the nine pads, spend $35,000 on site work, and you have created roughly $746,000 in gross value at a cap rate basis. That is the deal's embedded option.

What the financing looks like

MHP financing works differently than conventional apartment financing, and this is where independent buyers who are used to GSE-backed apartment loans often get surprised. Small MHPs — under 50 spaces — are often financed with portfolio loans from regional banks or credit unions rather than agency (Fannie Mae or Freddie Mac) execution, because GSE guidelines have historically required a minimum unit count that excludes very small parks. The good news is that SBA 504 loans and USDA rural development loans are available for manufactured housing community acquisitions in qualifying markets, and both carry below-market fixed rates with longer amortization schedules than conventional bank product.

For this specific deal, a SBA 504 loan at approximately 5.75 percent fixed for 25 years, with a 10 percent equity injection ($289,900) and a 50 percent senior loan from a CDC (about $1,449,500 at 5.75 percent), leaves a 40 percent private lender second position of approximately $1,159,600 at a market rate. Debt service on the first position at 5.75 percent over 25 years runs roughly $90,120 per year. Debt service on the second position at an estimated 7.5 percent over 15 years runs roughly $107,300 per year. Total debt service: $197,420 per year. Against $173,940 in current NOI, the deal barely covers at current occupancy. At 100 percent occupancy and the higher market lot rent of $410 average, gross income climbs to $305,040 and NOI to approximately $213,500, producing debt service coverage of 1.08x on the combined debt stack — thin, but workable.

The underwriting lesson here is not that this deal is marginal. The lesson is that MHP deals with below-market lot rents and sub-90-percent occupancy require a 95-percent-confidence fill plan before the debt coverage ratio holds at current financing terms. If you cannot explain who the nine vacant pad residents will be and why they will sign a one-year lot rental agreement, the deal does not work at this financing structure. The cap rate math looks attractive at 5.9 percent; the cash flow math requires you to actually achieve the occupancy upside.

3. One Market, One Metric: Clarksville, Tennessee, $395 average lot rent with 93.4 percent occupancy

The national figures cited above describe the country. The Southeast regional cohort — North Carolina, Tennessee, Georgia, and South Carolina — sits in roughly the 7 to 9 percent cap rate band (author's estimate, consistent with Keel Team's state-by-state MHP cap rate analysis), with stronger appreciation potential and lot rent growth history than Midwest or Plains parks. Within the Southeast, one market worth knowing is Clarksville, Tennessee.

Clarksville is a Fort Campbell army base adjacency market — the base employs roughly 30,000 active-duty soldiers and civilian workers and is one of the largest employers in the state. That employment base generates a steady, demand-insulated pool of households who are actively looking for affordable housing options. Manufactured housing fills a specific niche in the Clarksville market: a three-bedroom single-wide home on a rented lot at $395 per month in lot rent is affordable housing relative to the alternative of a one-bedroom apartment at $950 per month or a single-family rental at $1,650 per month.

The specific metric we are watching for Clarksville MHPs is $395 average lot rent with 93.4 percent occupancy in Q2 2025 — the author's tracked metric for this market (no official county-level series publishes this figure). The $395 average lot rent is the market-clearing rate for Clarksville MH lots, confirmed by MHVillage's Tennessee park directory, where multiple listed parks in the Clarksville and Montgomery County area advertise comparable lot rents. A 62-lot park in Clarksville at $395 per month and 93.4 percent occupancy produces annual gross income of approximately $275,000 and NOI in the range of $165,000 to $175,000. At a 7.5 percent Clarksville-market cap rate, that park is worth approximately $2.27 million. At the 5.9 percent national average cap rate estimate, the same NOI implies a value of approximately $2.88 million.

The 160-basis-point spread between the national average cap rate and the Southeast market-specific cap rate is not a reason to avoid Clarksville. It is the market's way of pricing the difference in risk: Southeast MHPs have slightly higher vacancy volatility than Midwest parks, slightly higher insurance cost due to severe weather exposure, and slightly less institutional buyer depth to provide exit liquidity. Independent buyers pricing their own risk should account for that 160 basis point in their discount rate, not assume it is free.

Three metrics to pull before any MHP offer

Before signing on any manufactured housing community purchase, these three numbers are not optional:

1. Submarket lot rent per MHVillage or local broker listings, not county average. MHVillage's Tennessee directory shows lot rents by individual park. A $395 average can hide a range from $340 to $460 depending on park condition and amenity level. You need the comp set for the specific park you are underwriting, not the county average.

2. Water and sewer cost per unit, actuals, trailing 12 months. MHP infrastructure costs are one of the most commonly underestimated expenses in deal underwriting. A park with aging cast-iron water laterals or individual septic systems can carry $30,000 to $60,000 in replacement reserve requirements that do not show up in the trailing expense ratio. Get the actual infrastructure age and condition from the seller's property condition assessment or commission a Phase I environmental and infrastructure assessment before the inspection period closes.

3. Lot lease terms for existing residents. Some MHP residents have multi-year lot leases with rent escalation clauses or "age-in-place" protections that limit the operator's ability to raise lot rent at turnover. These resident-protective lease terms reduce the lot-rent-to-market gap upside and need to be modeled explicitly. A park where 40 percent of residents have remaining two-year lease terms at below-market rates is not the same deal as a park where all residents are month-to-month.

Today's 5-Minute Action

Pick one action today that takes you closer to knowing whether an MHP acquisition is the right next deal for you:

Go to MHVillage.com, search for manufactured housing communities listed for sale in your target state or region, and pull the asking price and lot count for three properties. Divide the asking price by the lot count to get the per-space price. Compare that per-space price to the $58,400 national median per space (author's estimate). If the three properties you are looking at are priced below $58,400 per space in a market you know, there is a reason — deferred maintenance, vacancy, infrastructure issues, or a rent-restricted resident base. If they are priced above $70,000 per space in a non-coastal market, the deal has already been bid to institutional cap rate territory and is not the right entry point for an independent owner.

If MHVillage shows no listed parks in your target market, that is also a signal: low inventory means low transaction velocity, which means it is harder to find a motivated seller and easier to negotiate a private off-market deal through a local broker who handles MHP sales. Call one local commercial real estate broker in your target county and ask if they have any MHP sellers in their pipeline. Most will not, but one will.