Running a manufactured housing community is a different job from running an apartment building. You own the ground, the roads, the pipes and the amenities. The residents usually own the homes. That single split determines your expense ratio, your maintenance scope, your enforcement powers and where your margin leaks. This guide covers how the operation actually runs.

Four Businesses in One Property

Most communities are running more than one business at once, and the operators who struggle are usually the ones who have not separated them.

• The land-lease business:
  Renting homesites to people who own their homes. Low turnover, low maintenance, predictable. This is the business you want most of your revenue coming from.

• The utility business:
  Buying water, sewer, gas or electricity wholesale and recovering it from residents. Recovery is never 100%, and the gap is pure margin loss.

   

• The rental home business:
  If you own homes and rent them, you are a landlord in the ordinary sense, with roofs, furnaces and turns.

   

• The lending business:
  If you have sold homes on notes, you hold a loan book with servicing obligations attached.

The four have wildly different economics. Keel Team reports that tenant-owned-home dominant communities run operating expense ratios of 30% to 35%, against 55% to 65% for park-owned-home heavy properties. That is not a rounding difference. It is the difference between a good asset and a job.

Know which businesses you are in, and know what each one earns.

Buying rather than operating? See buying a manufactured housing community for the diligence side.

What a Community Actually Earns and Spends

Start with the shape of the P&L, because everything operational either shows up here or does not matter.

CT Acquisitions publishes a worked example for a 100-lot community in a Tier 2 metro that is a useful reference point:

Two things stand out. Utility recapture and ancillary income together contribute roughly 8% of gross revenue, which is more than most operators realise and more than most collect. And a 44% expense ratio is on the high side.

Where expense ratios should land. Keel Team's valuation guide puts stabilised communities at 30% to 45% of effective gross income, and notes that higher ratios usually signal operational inefficiency or deferred maintenance, which buyers will eventually price into the cap rate they offer you.

Utility infrastructure is a major driver. Parkvestor's deal analyser cites a rule of thumb of roughly 30% for communities on public water and sewer against roughly 40% for those on private utilities, with around 25% achievable where residents pay utilities directly.

So: if you are running above 45%, the question is usually one of three things. Are you carrying park-owned homes? Are you absorbing utility cost you could recover? Or has maintenance been deferred to the point where it now costs more than it would have?

Lot rent levels. Keel Team reports 2026 lot rents ranging from $350 to over $700 per month, with established communities commonly in the $450 to $650 range and well-located Sun Belt communities exceeding $700.

Vacancy and credit loss. Keel Team suggests budgeting 5% to 10% for a stabilised community. If yours is materially higher, that is usually a collections problem rather than a market problem, and it is fixable.

The Operating Model

There is no single right structure, but there are three common ones and they suit different portfolio shapes.

• On-site manager:
  Usually a resident of the community who handles rent collection, minor maintenance, rule enforcement and being visible. The economics only work at a certain scale, and where that line sits depends on lot count and rent levels. The arrangement also needs care: a manager who is also a resident has a compensation arrangement that may interact with their lot lease, which is worth getting in writing.

• Regional manager across several communities:
  Common for portfolios of smaller communities within driving distance. One person covers several communities, with a local contact at each for eyes on the ground.

• Remote management with local vendors:
  Rent collection online, maintenance through local contractors, periodic site visits. Cheapest and increasingly common. It works when your systems are good and fails badly when they are not, because nobody notices the problem until it is expensive.

Whichever model, three functions have to sit somewhere and be someone's named responsibility: collections, enforcement, and utility reading. These are the ones that quietly stop happening when nobody owns them.

Lot Rent Operations

Setting it:
Comparables come from competing communities within a realistic radius, not from apartment rents. Establish where you sit against market. A community well below market has value to capture, but capturing it takes years, not quarters.

Collecting it:
This is where MH diverges most sharply from multifamily. A meaningful share of residents in this sector are unbanked or prefer cash, and a portal-only collections strategy will produce delinquency that has nothing to do with ability to pay. Offer online payment, autopay, walk-in payment locations and money order handling. Then measure adoption by method and move people gradually rather than by decree.

Applying partial payments:
 When a resident pays part of what they owe, something has to decide which charge clears first: lot rent, home rent, utilities or fees. In some states the order is set by statute. Decide it deliberately, apply it consistently, and document it, because "whatever the system did" is not a defence.

Raising it:
Three constraints stack:

• Notice period. Commonly 30 to 90 days in states with dedicated manufactured housing statutes.

• Frequency limits. Several states allow only one increase per twelve months.

• Rent regulation. Oregon and Washington impose statewide limits on manufactured home space rent increases, with the applicable cap depending on the property and tenancy. Municipal ordinances regulate in parts of California, New Jersey, New York and Massachusetts.

Get the notice wrong and the increase may be unenforceable for that cycle, delayed until the required period runs, or subject to whatever remedy the state specifies. That can cost a full year of foregone revenue from an administrative error.

Full detail: manufactured housing community laws by state.

The rate of increase matters as much as the amount. CRI Brokerage's 2026 outlook argues for 3% to 4% annual increases rather than the aggressive bumps of the peak market, on the basis that residents under affordability pressure respond poorly to sudden spikes. That advice is about collections as much as goodwill. A resident who cannot pay does not move out. They stop paying, and now you have a legal process instead of a rent roll.

Utility Operations

If there is one area where average operators leave money on the table, this is it.

Know your model:
Master-metered communities buy in bulk and recover from residents. Submetered communities measure each homesite. Direct-billed communities have the utility bill residents individually, which removes the problem entirely and is worth pursuing where the utility will allow it.

The recovery ratio:
Divide what you recovered from residents by what you paid the utility. Track it monthly, per community. Many operators have never calculated it, and the ones who do are frequently unpleasantly surprised.

A community recovering 70% of a water bill on a master meter is losing 30% of that spend permanently. On a large community that is a real number, and it compounds every month it goes unmeasured.

Where the gap comes from:
Four places worth checking:

1. Leaks in your distribution system, which you pay for and nobody is billed for

2. Leaks inside homes, on lines the resident owns, which you may still be paying for depending on where the meter sits

3. Vacant lots still drawing water

4. Read-to-bill lag, where consumption in one month gets billed two months later and the timing difference never closes

Turning variance into a work order:
This is the workflow that pays for itself. A submeter reading substantially above its own trailing average means something is wrong at that homesite. Catching it in month one instead of month six is the entire value of submetering, and it only happens if the variance report generates a maintenance ticket rather than a spreadsheet tab nobody opens.

Where submeters do not exist:
Allocation by occupancy, home size or a formula. Check what your state permits before designing it, because several states restrict both the method and the markup, and some require the allocation basis to be disclosed to residents.

Community Standards and Enforcement

Enforcement in a land-lease community is different because the resident owns the home. You cannot simply decline to renew, and the statute usually enumerates the grounds on which you can act.

• Rules have to exist, be current and be delivered:
  Rules that have not been amended in decades are harder to enforce. So are rules nobody can produce a signed acknowledgement for.

• The cycle is notice, cure period, escalation:
  In many jurisdictions the notice has to identify the applicable rule and the specific breach with enough precision to support what follows. A letter saying "please tidy your lot" will not sustain a termination two years later.

• Document everything, and assume you will need it in three years:
  Dated notice, rule cited, cure period given, photographs, what happened next. Attached to the homesite, not to a manager's memory or a folder on somebody's desktop. Staff turn over. The file has to outlive them.

• Enforce evenly:
  Selective enforcement is difficult to defend. If the rule is not going to be enforced against everyone, the honest move is to amend the rule.

• Common flashpoints:
  vehicle storage and inoperable vehicles, skirting condition, decks and steps, pets, occupancy limits, lot upkeep, unauthorised structures and sheds. Most of these are genuinely about safety or appearance. Occupancy standards are worth particular care, because they interact with fair housing requirements. Set yours with legal advice rather than by rule of thumb.

Maintenance and Who Owns What

The maintenance boundary is a common source of resident disputes in this sector, and it is worth writing down explicitly rather than assuming everyone knows.

• Typically the community's responsibility:
  roads, common area lighting, water and sewer mains up to the connection point, common area landscaping, amenities, drainage, entrance and signage, and any shared infrastructure.

• Typically the resident's, where they own the home:
  the home itself, its roof, systems and skirting, the service lines from the connection point in most arrangements, and the lot's upkeep to the standard your rules set.

• The genuinely ambiguous ones:
  the water line between the main and the home, trees, and the pad or runners themselves. Say where the boundary sits in the lease and the rules. Ambiguity here produces arguments at the worst possible moment, which is when something has already failed.

   

• Preventive work that earns its cost:
  water line inspection and leak detection, road patching before it becomes resurfacing, tree management before a storm makes the decision for you, and electrical pedestal inspection. All four are the kind of thing that is cheap on a schedule and ruinous on an emergency call-out.

   

• Capital planning:
  Roads, water lines, sewer lines and electrical distribution all have finite lives, and in a community built in the 1970s several of them are approaching the end together. A reserve study is worth commissioning once and updating rather than discovering the problem line by line.

Occupancy and Infill

• Measure occupied homesites, not homes:
  Three numbers matter and they are not the same: total platted lots, usable lots, and occupied lots. A community with 120 platted lots, 104 usable and 88 occupied has a very different infill story depending on which denominator you use. Economic occupancy is the other half. Physical occupancy of 92% with 8% of residents not paying is 84% economic occupancy, and the second number is the one that pays your debt service.

• Infill is the slowest and most valuable thing you do:
  Every filled lot adds lot rent in perpetuity at close to zero marginal operating cost. The work is in getting a home onto the lot: sourcing, transporting, setting, skirting, steps, utility connection, permits, and then selling or renting it.

• Track cost per lot filled:
  All in, including everything above. Then compare it against the annual lot rent divided by your cap rate. That comparison tells you whether infill is your best use of capital or whether road repair is.

• Check zoning before you plan it:
  Some ordinances restrict the age or appearance of replacement homes, which can make filling a lot with an older acquired home simply not permitted. Find this out before you buy the home.

Park-Owned Home Operations

If you own homes, run it as a separate business with its own numbers. The expense ratio gap cited earlier is what happens when this business is not managed deliberately, rather than an inherent property of owning homes.

• Track cost basis per home:
  Acquisition, transport, set, rehab. Without it you cannot tell whether a sale made money.

• Track turn costs
  An older home between residents is a real renovation, not a clean and paint. Budget accordingly and record what it actually cost.

• Decide your direction:
  Most operators are either building a rental home portfolio deliberately or working to reduce it by selling homes to residents. Drifting between the two is the expensive option. Selling converts a maintenance liability into lot rent plus either a clean exit or a note, and it improves your agency financing profile.

• If you sell on notes, you are lending:
  That means amortisation schedules, principal and interest splitting, interest income recognition, and lien recording and release. Consumer lending is regulated at federal and state level, and which rules apply depends on your structure and volume. Get advice before you originate rather than after, and do not treat it as an extension of leasing.

Resident Relations

Worth a section of its own, because in this sector it is an operating asset rather than a soft skill.

Relocating a manufactured home is expensive enough that most residents never do it, which is why turnover in this sector is so low. It is also why resident relations matter more here than in multifamily. Your residents are not going anywhere, and neither are you. A community where the relationship has broken down does not empty out. It stops paying, disputes every charge and calls the state agency.

Things that work, none of them expensive:

• Be visible. A manager who is only seen when something is wrong becomes the person associated with things being wrong.

• Communicate before changes, not with them. A rent increase notice that arrives with no prior context reads as an ambush even when it is entirely lawful.

• Fix visible things first when you take over. Potholes, lighting, the entrance sign. It signals direction more effectively than a letter.

• Respond to maintenance requests on a stated timeframe, and tell people when you cannot meet it.

• Take utility billing disputes seriously. A resident who believes their bill is wrong and gets brushed off tells forty neighbours.

The Operating KPI Set

Twelve numbers, reviewed monthly, per community rather than portfolio-wide:

Portfolio averages hide the community that is failing. Review by community.

The Compliance Calendar

Every community carries recurring obligations, and the failure mode is almost never ignorance. It is that the date passed.

Hold against each community: applicable state statute, rent increase notice period, last increase date, next permissible increase date, lease renewal dates, any prospectus or disclosure obligation, licence and inspection renewals, water system testing and reporting where you run private utilities, insurance renewal, and age-occupancy verification, including the updates required at least once every two years, if you operate as a 55+ community under the HOPA exemption.

That last one catches people. The 80% occupancy requirement is not a one-time filing. HUD's rule requires procedures for routinely determining occupancy and updating that information at least every two years, and letting it lapse puts the familial status exemption at risk.

For multi-state operators, this needs to live in a system that generates the notice from the record rather than in a folder of last year's templates with the dates changed. RIOO's workflow and customization layer supports configurable workflows, role-based routing and audit trails structured at the property or community level.

Conclusion

The operating thesis in this sector is genuinely good. Residents who own their homes rarely move, maintenance scope is narrow, capital sits in shared infrastructure rather than individual units, and expense ratios in the low thirties are achievable on communities with public utilities and predominantly tenant-owned homes.

The thesis breaks in predictable ways. Utility cost you never recovered. Park-owned homes accumulating without anyone tracking their real cost. Maintenance deferred until it became capital. Enforcement that was never documented well enough to act on. A rent increase undone by a notice served four weeks late.

None of those are complicated problems. They are all problems of measurement and follow-through. Which is the honest summary of this whole job: the operating model is simple, and the margin lives in whether anyone is actually watching the numbers that matter.

Start with the utility recovery ratio. If you have never calculated it, that is where the money is.

RIOO is a property management platform built natively on Oracle NetSuite for property teams managing complex, multi-entity portfolios.

Frequently Asked Questions

1. What is a good operating expense ratio for a manufactured housing community?
Keel Team's 2026 valuation guide puts stabilised communities at 30% to 45% of effective gross income. Parkvestor cites a rule of thumb of roughly 30% for communities on public water and sewer against roughly 40% on private utilities, with around 25% achievable where residents pay utilities directly. Ratios above 45% usually indicate park-owned homes, unrecovered utility cost or deferred maintenance.

2. What is the average lot rent in 2026?
Keel Team reports 2026 lot rents ranging from $350 to over $700 per month. Established communities commonly sit in the $450 to $650 range, while well-located Sun Belt communities can exceed $700. Local comparables matter far more than the national range.

3. How should a manufactured housing community be staffed?
Three models are common: an on-site manager, a regional manager covering several nearby communities, or remote management with local vendors. Which fits depends on size, rent levels and how many communities you hold. Whatever the structure, collections, enforcement and utility reading each need a named owner.

4. How do I improve utility recovery?
Start by calculating the recovery ratio: what you billed residents divided by what you paid the utility. Then find the gap, which usually comes from distribution leaks, leaks inside homes, vacant lots still drawing water, or read-to-bill timing. Submetering with a variance report that generates work orders addresses most of it.

5. What maintenance is the community responsible for versus the resident?
The community typically covers roads, common lighting, mains up to the connection point, landscaping, amenities and drainage. Where the resident owns the home, they typically cover the home, its systems and skirting, and lot upkeep. The service line, trees and the pad itself are genuinely ambiguous, so define them in the lease rather than assuming.