San Antonio MHC Market Report

By Casey Thom - Sunstone Real Estate Advisors

In a survey of 41 communities equaling 7,901 pad sites, San Antonio has a 94% occupancy rate and an average lot rent of $409 net of utilities. The San Antonio MSA is expected to grow by 52,295 people in 2019, approximately 2%. Multifamily occupancy has increased 0.9% to 92.9% and effective rent in apartments has increased 3.4% since 2017, while the median home price has increased 5.5% from August 2017 to August 2018 where it stood at $220,000. Home inventory is still very tight at 3.5 months of inventory, down 0.1 months from 2017. All these factors indicate an increased demand for affordable housing options.

This data set consisted of 13 communities under 100 pad sites, nine between 100 and 200, and 19 above 200.

San Antonio Area MH Lot Rents

Pad SitesAvg. Lot Rent Net of UtilitiesAvg. Lot Rent/2-BR Apt Rent
<100 Sites $373 40%
100-200 Sites $397 43%
200+ Sites $447 48%

We notice a significant difference in the rental rate charged, and the percentage of lot rent as a percentage of median 2-bedroom apartment rent as the communities increase in size. We attribute this to the sophistication of the operator. Of the 19 largest communities, 13 are owned by top 20 operators in comparison to four of the 22 communities with less than 200 pad sites.

From our nationwide study of over 7,000 communities in the 220 largest MSAs we found that with an average lot rent of $409, San Antonio ranks 122nd in the nation (national average- $421), and at a 44% LR/Med. 2BR Apt. Rent San Antonio ranks 135th (national median- 46%).

Communities with a high percentage of residents making home payments should consider the affordability of the all-in home payment, lot rent, taxes, and insurance. We compared communities nationwide, using the assumption of a resident purchasing a home with a $45,000 note balance, on a 15-year amortization, at 8% interest, with insurance rates specific to the county. The amount above and beyond lot rent came out to roughly $565. The national median percentage of all-in payments to median 2-bedroom apartment rent was 105%. San Antonio comes in exactly in line with the national median at 105%. Of the 41 communities surveyed, 21 exceed the national median. Only 2 of the 21 exceed the 3-bedroom apartment rent for the community’s unique address. Regency Village is located near 3-bed room options which are priced unusually low for the MSA, and Garden Valley barely breaches the 3-bedroom multifamily options ($20 ~2%) and has an extensive amenity set including gated access and a 25m pool.

In conclusion, due to strong market characteristics, we feel there is still ample room for lot rent growth, particularly in those communities with 200 pad sites or less.