Tenant-Owned vs. Park-Owned Homes: Which Model Performs Better?

If you’re buying, selling, or running a manufactured home community, there’s one structural question that shapes almost everything else about the deal: do the residents own their homes, or does the park? It sounds like a small distinction. It isn’t. The answer affects your expenses, your risk, your day-to-day workload, and ultimately what your community is worth.

Here’s a plain-English look at both models and how to think about them.

The Two Models

In a tenant-owned home (TOH) community, residents own their actual homes and simply rent the land underneath. This is the classic manufactured housing arrangement, and it’s the structure that makes these communities operationally simpler than traditional apartments. You’re essentially in the land-lease business.

In a park-owned home (POH) community, the operator owns some or all of the physical homes and rents them out, much like a landlord renting houses. You collect more per unit, but you also own the maintenance, repairs, and turnover that come with the structures themselves.

Many real communities are a mix of both.

Why the TOH Model Tends to Win on Paper

The biggest advantage of tenant-owned communities is operational simplicity. When residents own their homes, they handle their own upkeep, repairs, and appliances. Your responsibilities are largely limited to the common infrastructure, such as roads, landscaping, and utilities. That keeps your operating costs lower as a share of revenue, which is exactly why TOH-heavy parks typically command stronger valuations than POH-heavy ones.

These communities also tend to be remarkably stable. Moving a manufactured home is expensive and finding an open lot elsewhere can be difficult, so residents who own their homes tend to stay put for years. Low turnover translates into steady, predictable income, which is precisely what makes the asset class attractive.

Where Park-Owned Homes Can Make Sense

The POH model isn’t a mistake; it’s a different strategy. Owning the homes gives you more control over who fills your lots and the condition of the inventory, and it can be a deliberate path toward filling vacancies in a community that needs it. Some operators use park-owned homes as a bridge, renting initially and then helping residents transition into ownership over time.

The tradeoff is real, though. More ownership means more maintenance liability, more turnover, and thinner margins relative to revenue. It’s a more hands-on business.

What to Look For as a Buyer

If you’re evaluating a community to purchase, get clear early on what you’re actually buying:

• The real mix. A listing that looks attractive on top-line revenue may be carrying heavy park-owned-home expenses underneath. Understand the true cost structure, not just the gross income.
• The condition of park-owned units. Aging homes you own are future repair bills.
• The infrastructure. Utilities, roads, and water and sewer systems ride along with either model and can carry significant deferred costs.

The Bottom Line

There’s no universally “right” answer, but the models behave very differently. Tenant-owned communities generally offer lower operating costs, lower turnover, and stronger valuations, while park-owned arrangements offer more control at the cost of more work. The key is knowing which model you’re operating, or buying into, and underwriting it honestly.

At MHP Loan Pro, we help owners and buyers navigate the financing realities of both models. If you’re sizing up a community, we’re glad to talk through your options.