The five-year average dividend yield for various real estate investment trusts is amongst the lowest for manufactured homes at 2.6%, SP Global reported. Manufactured homes cost only two-thirds the rate of existing site-built homes and less than half the cost of new site-built homes, per Deloitte.
Additionally, manufactured homes are smaller averaging roughly 1,500 square feet, than existing homes with an average size of approximately 2,100 square feet, and new builds with an average size of nearly 2,700 square feet, Deloitte reported.
That’s one reason manufactured homes have the potential to solve affordability and supply issues, since they are smaller and cheaper to build. Meanwhile, restrictive zoning regulations and other financing hurdles have limited the growth of this REIT sector.
Here are two dividend-paying REITs to consider as the sector may see increasing interest during a potential recession.
Sun Communities Inc. SUI is offering a dividend yield of 2.43% or $3.52 per share annually, using quarterly payments, with a decent track record of increasing its dividends for five consecutive years. Sun Communities is a real estate investment trust that acquires, operates, and develops manufactured housing and recreational vehicle communities throughout the United States. The Michigan and Florida markets account for most of the firm’s holdings.
As of Sept. 30, 2022, Sun Communities owned, operated, or had an interest in 662 developed manufactured homes, RV and marina properties comprising over 180,500 developed sites and over 46,100 wet slips and dry storage spaces in 39 states, Canada, Puerto Rico and the U.K.
Equity Lifestyle Properties Inc. ELS is offering a dividend yield of 2.48% or $1.64 per share annually, making quarterly payments, with a track record of increasing its dividends once in the past year. Equity Lifestyle Properties is a real estate investment trust primarily engaged in the ownership and operation of manufactured home communities and recreational vehicle (RV) campgrounds throughout the U.S. The vast majority of the company’s real estate portfolio consists of sites located near bodies of water in Florida, the Northeastern region of the U.S., Arizona, and California.
Equity Lifestyle Properties owns or has a controlling interest in more than 449 communities and resorts in 35 states and British Columbia with more than 170,000 sites, and $17.1 billion in enterprise value, as of June, 30, 2022.
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