In 2019, Canada Apartment Properties Real Estate Investment Trust (CAPREIT) purchased 68 manufactured home parks in B.C., Alberta and Ontario with more than 11,000 homes, which has expanded since to 77 such communities.
Now Mark Kenney, CEO of CAPREIT, says manufactured home offer a viable solution to the housing shortage and soaring prices that characterize Canada’s current housing environment.
“We have a housing crisis with a historical solution sitting right in front of us, it is absolutely staring us in the face,” Kenney, told Bloomberg in a recent interview.
CAPREIT is Canada’s largest landlord with more than 60,000 rentals and $16 billion in assets.
Kenney explains Canada has plenty of land and the recent pandemic showed that more people can work from anywhere – so why not in a factory-built detached house that sells for a fraction of a home in the city and rests on a pad that often rents for less than $500 a month?
Not incidentally, CAPREIT, like other investors, have found that manufactured homes can be a profit spinner, offering low tenant turnovers and higher capitalization rates than conventional rentals.
Bill Summers of B.C.-based Lighthouse Realty Ltd. said ‘mom-and-pop’ investor interest in manufactured home parks is rising this year, and high returns are a key reason. He said many buyers are coming from the Lower Mainland.
In Summers’ most recent sales in B.C.’s Interior, manufactured home park prices ranged from $1.2 million to $3.3 million, and the cap rates were from 5 per cent to 5.5 per cent. This compares to an average cap rate of sub-3 per cent in most of Metro Vancouver, where the average detached home price is north of $1.8 million.
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