However, MH communities aren't trailer parks anymore. After all, there are differences between MH and SFH options. Needless to say, a direct comparison isn't extremely fair. Since the pandemic, the difference in costs has changed in favor of manufactured homes. 75% of residents have an age of at least 39. When adding household incomes under $40,000, we end up with roughly 2/3rd of residents.
While upfront costs are 18% higher, the monthly costs are 71% lower.Īccording to the Manufactured Housing Institute, a quarter of MH residents had a household income of less than $20,000. This is 76% below the average price of a single-family home. According to ELS, which uses US Census Bureau data, the host of a typical manufactured home is $124 thousand. More than 70% of ELS MH properties are age-restricted, which helps when it comes to capturing growth in this demographic. Roughly 10,000 Baby Boomers will turn 65 every day through 2030. This group is expected to grow by 17% between 20. Generally speaking, manufactured housing attracts aged 55 and older. Through 2025, the company plans to add roughly 1,000 sites per year. These properties cover more than 171 thousand sites and are maintained and managed by roughly 4,200 employees. They have a geographically diversified portfolio of over 110 properties with lake, river, or ocean frontage, as well as more than 120 properties within 10 miles of the coastal United States.Īs of December 31, 2022, the company owns 449 properties in 35 states and one Canadian Province. They offer individual developed areas or right-to-use contracts, known as membership subscriptions, which provide limited stays at specific properties.Ĭompared to other real estate companies, ELS' business model has low maintenance costs and low customer turnover costs. The company owns land that is leased to customers who own manufactured homes, cottages, RVs, and/or boats on a long-term or short-term basis. With a market cap of $12.5 billion, the company is the 8th-largest residential REIT. Why I Like The Equity LifeStyle Business Modelįounded in 1969, ELS has become one of the largest residential real estate firms in the United States. So far, that place has been self-storage. However, as I prioritize the mix between growth and value, I look for real estate niches that serve my needs.
In that situation, it doesn't matter too much if these investors don't outperform the S&P 500. For example, if investors retire, they might want to prioritize stocks with high dividends, as it allows them to cover costs - and to retire in the first place. I want a combination of growth and value.įor example, over the past ten years, the Vanguard Real Estate ETF ( VNQ) has underperformed the S&P 500 by a wide margin, returning just 64%, including dividends.Īgain, there is nothing wrong with buying stocks that underperform. While I do not disagree with that, I prefer REITs that come with decent total returns. In general, investors tend to buy REITs for one major reason: yield. So, let's get to it! I Want Growth And Value In light of current economic developments, I will walk you through my thoughts and explain why I am now preparing to add ELS shares to my portfolio. The company is perfect for my dividend growth portfolio, thanks to secular tailwinds, inflation protection, a healthy balance sheet, and a fantastic track record of dividend growth and outperforming capital gains, which I expect to continue. This residential real estate company is focused on manufactured housing communities, recreational vehicle communities, and marinas. One of the stocks I had on my radar for many years is Equity LifeStyle Properties ( NYSE: ELS). This consists of Extra Space Storage ( EXR ) and Public Storage ( PSA ). I have 9.2% real estate exposure while I am writing this. In a number of articles, I've said that I wanted to increase my real estate exposure.
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