Would-be investors facing steep competition within the industrial, hospitality, office and apartment sectors are increasingly turning to an alternative that can offer less competition and lower risk: manufactured housing. In recent years, there has been a confluence of socioeconomic factors that make this previously underappreciated sector an increasingly popular investment.

“The manufactured housing industry specifically serves two demographic groups: retirees who are on fixed incomes and people that are looking for affordable housing,” said Michael Nissley, national director of Colliers International’s Manufactured Housing Group.

Today, the following factors are driving demand for manufactured housing:

Smaller and medium-sized investors who don’t have the capital to compete for the traditionally more popular hospitality, office, industrial and apartment investments can benefit from the fact that manufactured housing is a fragmented industry dominated by mom-and-pop businesses, much like the self-storage industry before the recent boom. However, savvy entrepreneurs including real estate mogul Sam Zell and Warren Buffett have invested heavily in manufactured housing for several decades.

“Manufactured housing has very little published data,” Nissley said. “So there’s still a lot of opportunity.”

That doesn’t necessarily suggest that entrepreneurs should purchase the first manufactured housing community that they encounter. As with any investment, research, data and insight are vital. Nissley recommends paying particular attention to these three factors:

Historically, obtaining a loan to invest in manufactured housing was difficult if not outright prohibitive. But the lending industry seems to have experienced a change of heart. In fact, Nissley said there are loans in abundance. Motivated by the overall health of the manufactured housing industry and the low default rate among existing industry loans, lenders are now helping to drive manufactured housing as a viable investment opportunity.

When, or whether, manufactured housing achieves the same level of interest other commercial property sectors enjoy remains to be seen. But there’s plenty of opportunity, for now.

“Manufactured housing is becoming more competitive but relatively speaking it’s still virgin territory,” Nissley said. “There are opportunities that don’t exist in most other segments.”