1. The Structural Separation of Land and Improvements
- The resident owns or finances the manufactured home and is responsible for all interior upkeep, roof, appliances, flooring, and plumbing fixtures.
- The investor owns the dirt and infrastructure: the parcel, paved roadways, underground utility lines, stormwater systems, and common area amenities.
- The resident pays a recurring monthly lot rent for the right to place the home on the site and connect to community utilities.
2. Apartments vs. Land-Lease Communities
- Typical operating expense ratio: 45%–55% for apartments vs. 30%–40% for a submetered community.
- Average resident tenancy: 1 to 2 years vs. 10 to 15+ years.
- Turnover cost: $2,000–$4,000 per unit vs. $0–$500 for minor pad prep.
- CapEx volatility: continuous interior renovations vs. long-life infrastructure — roads, pipes, pedestals.
- Recession downside: moderate for apartments vs. exceptional protection where residents defend their own home equity.
3. The Economics of Home Immobility
Moving a manufactured home requires disconnecting plumbing, sewer, and electrical, unbolting tie-down anchors, removing skirting, transport permits, pilot escorts, re-leveling, and municipal inspections — typically $5,000 to over $12,000.
When a resident moves, they almost always sell the home in place. The new owner steps into the existing lease, producing continuous, uninterrupted lot rent collection.
Key Takeaway
By eliminating interior maintenance and structural turnover, the land-lease model operates with lower overhead, higher net margins, and predictable recurring revenue.