The mobile home park industry has attempted to re-invent itself many times in the past. Unfortunately, it always seems to revolve around just changing its name, and nothing else. And the name change does little to actually accomplish anything of value, but only serves to confuse people on a product that is already chock full of misconceptions. So here's an analysis of why the “land-lease” name is not the greatest idea.
Nobody understands what Land-Lease Community means
The original name of “mobile home” at least conveyed the selling point that the home could be moved from one place to another. Of course, this sales point is not overly attractive to the average homebuyer. And, actually, it was completely wrong, since less than 1%of mobile homes ever move after they have been delivered by the factory. The name “mobile home park” has an equally clear meaning – it's a place you park mobile homes. When you say “mobile home park”, there is absolutely no confusion as to what you are describing. However, “land-lease community” would be like calling a baseball bat “a percussion device” or a pancake a “syrup receptor”. If you line up 100 Americans and ask them what a “land-lease community” is, not one would be able to identify it, but probably 30 would think it's a rental center.
We already changed the name recently
The mobile home park industry unofficially adopted the new name “manufactured home community” about a decade ago. At that time, the industry was trying to upgrade its image, and let's all admit that having a home on wheels does not impress anyone at a cocktail party. Since “mobile” is inaccurate, and the word “manufactured” is accurate, the new name was generally accepted. Of course, actual folks in the industry still use the term “mobile home park” in regular conversation, but we all put “manufactured home community” on our signs and letterhead to give us a touch of class – kind of like the dirty football player who puts on a tuxedo for the awards ceremony. Changing it again to “land-lease community” seems kind of ridiculous, since it seems like we just made a name change.
It does not address the real issues
Of course, the biggest reason to stop making industry name revisions is that it does absolutely nothing to enhance the value of the asset. If you really want to change things, then focus on the real issues of taking mobile home parks to the next level among investors and lenders by offering real statistics, better industry public relations, and better focus on mobile home park legal challenges. No investment bank is going to pay a lower cap rate for a “land-lease community” instead of “mobile home park”. No appraiser is going to say “I'll put an extra $300,000 of value on this property because it's called a “land-lease community” and not some nasty old trailer park”. If changing the name really made everything better, then J.C. Penney would now be “Le Penny JC”. It works for witness protection programs, but not for real estate niches.
The discussion concerning changing the name to “land-lease communities” is frankly embarrassing. Let's put that same effort into something more productive. The mobile home park business is doing very well right now. Affordable housing is in hot demand as the U.S. economy declines. Let's not confuse everyone with some cheesy new name. Instead, let's just keep improving the product that's inside the box.