Sun Communities
The largest manufactured housing REIT — where owning the land underneath a home creates the stickiest tenant relationship in real estate.
Manufactured housing seems cheap and bottom-market. Sun communities own 670 communities across America and saw what competitors missed. The economics inverted. Homes depreciate like cars, losing value yearly. Land appreciates at 3% annually. Own land, rent to homeowners, capture appreciation while they own depreciating assets. A resident buys a mobile home for $50,000. Sun owns the land and collects rent. The home depreciates and becomes worthless. The land appreciates at 3% yearly. Land rent climbs from $300 monthly to 450 in 10 years. Residents experience rising rents, but can sell their home anytime. Real estate normally means buying land, maintaining properties and selling for appreciation.
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