UMH Properties, Inc. (UMH): Business Model Canvas [11-2024 Updated]

Discover the innovative approach of UMH Properties, Inc. (UMH) as we delve into its Business Model Canvas. This strategic framework outlines how UMH delivers affordable housing solutions through a well-structured network of partnerships, key activities, and value propositions. Join us as we explore the essential components that define UMH's operations and customer engagement, revealing how they cater to the needs of low to middle-income families and investors alike.

UMH Properties, Inc. (UMH) - Business Model: Key Partnerships

Joint ventures with Nuveen Real Estate

UMH Properties, Inc. holds a 40% equity interest in a joint venture with Nuveen Real Estate, which owns two newly developed communities and one community currently in development. These communities are unencumbered, enhancing the partnership's potential for financial flexibility and investment opportunities.

Collaborations with Triad Financial Services for financing

UMH collaborates with Triad Financial Services to provide financing options for the purchase of manufactured homes, which facilitates access to affordable housing for customers. This partnership is integral in supporting the sales operations and enhancing the customer experience within UMH's communities.

Partnerships with local governments for community development

UMH partners with local governments to promote community development initiatives. These collaborations aim to enhance the living standards within manufactured home communities and support sustainable development practices.

Partnership Type	Partner	Equity Stake	Community Impact
Joint Venture	Nuveen Real Estate	40%	Two developed communities; one under development
Financing Collaboration	Triad Financial Services	N/A	Financing for manufactured home purchases
Community Development	Local Governments	N/A	Enhancement of living standards in communities

UMH Properties, Inc. (UMH) - Business Model: Key Activities

Management and operation of manufactured home communities

UMH Properties, Inc. owns and operates 139 manufactured home communities, with a total of approximately 10,300 rental homes, which represent 39.7% of total sites. As of September 30, 2024, the occupancy rate for rental homes was 94.4%, reflecting strong demand in the current housing market. The rental and related income for the three months ended September 30, 2024, was $51.9 million, an increase of 8% from $48.1 million in the same period of 2023. For the nine months ended September 30, 2024, rental and related income reached $153.8 million, up 9% from $140.5 million in 2023.

Period	Rental and Related Income (in millions)	Occupancy Rate (%)
Q3 2024	$51.9	94.4
Q3 2023	$48.1	93.7
9M 2024	$153.8	N/A
9M 2023	$140.5	N/A

Acquisition and development of new properties

During the nine months ended September 30, 2024, UMH Properties increased its total investment property by 4%, or $58 million, in conjunction with adding 284 rental homes, net of 202 homes sold. The company is actively preparing sites for additional homes to further enhance its portfolio. The occupancy rate for its rental homes portfolio increased by 40 basis points, from 94.0% at the end of 2023 to 94.4% by September 30, 2024. The company is also expanding its joint venture with Nuveen Real Estate to develop a new community in Pennsylvania, which will feature 113 manufactured home sites.

Sales and leasing of manufactured homes

Sales of manufactured homes for the three months ended September 30, 2024, amounted to $8.7 million, representing a 10% increase from $7.9 million in Q3 2023. The number of homes sold increased from 90 to 100 in the same period. For the nine months ending September 30, 2024, sales totaled $24.9 million, up 6% from $23.4 million in 2023. The gross profit percentage on home sales improved to 38% in Q3 2024 compared to 33% in Q3 2023.

Period	Sales of Manufactured Homes (in millions)	Number of Homes Sold	Gross Profit Percentage (%)
Q3 2024	$8.7	100	38
Q3 2023	$7.9	90	33
9M 2024	$24.9	300	34
9M 2023	$23.4	264	31

UMH Properties, Inc. (UMH) - Business Model: Key Resources

Portfolio of 139 manufactured home communities

UMH Properties, Inc. operates a diverse portfolio comprising 139 manufactured home communities, which include two communities owned through a joint venture with Nuveen. This strategic portfolio is essential for providing affordable housing options and generating steady rental income, with the majority of these communities being strategically located across the United States.

As of September 30, 2024, the company reported a total of approximately 9,700 occupied rental homes, an increase of 4% from the previous year. The occupancy rate of the rental homes increased to 94.4% compared to 94.0% at December 31, 2023. The company has effectively maintained and improved occupancy through annual rental rate increases of about 5% to 6%.

Metric	Value
Total Communities	139
Occupied Rental Homes	9,700
Occupancy Rate	94.4%
Annual Rental Rate Increase	5% - 6%
Communities Owned with Nuveen	2

Skilled management team with real estate expertise

UMH Properties boasts a skilled management team with extensive experience in real estate operations and management. This expertise is critical in identifying, acquiring, and managing manufactured home communities efficiently. The management's strategic decisions have been pivotal in achieving an increase in Community Net Operating Income (NOI), which rose by 11% from $79.7 million in the nine months ended September 30, 2023, to $88.6 million in the same period of 2024.

Metric	Value
Community NOI (2023)	$79.7 million
Community NOI (2024)	$88.6 million
Increase in NOI	11%
Occupancy Rate Increase	70 basis points

Financial resources from equity and debt financing

As of September 30, 2024, UMH Properties had total assets of $1.5 billion and total liabilities amounting to $643.1 million. The company utilizes a balanced capital structure, combining equity and debt to finance its operations. Notably, the net debt to total market capitalization ratio stands at approximately 22%.

In the nine months ended September 30, 2024, the company raised $166.0 million through its Common At-The-Market (ATM) Program, selling 9.4 million shares at a weighted average price of $17.55 per share. Additionally, it has $260 million available on its credit facility, which provides further liquidity for potential acquisitions and operational needs.

Metric	Value
Total Assets	$1.5 billion
Total Liabilities	$643.1 million
Net Debt to Total Market Capitalization	22%
Funds Raised via ATM Program	$166.0 million
Available on Credit Facility	$260 million

UMH Properties, Inc. (UMH) - Business Model: Value Propositions

Affordable housing options in manufactured home communities

UMH Properties, Inc. provides affordable housing through its network of manufactured home communities, which includes 139 communities across various states. As of September 30, 2024, these communities contain approximately 26,200 developed homesites, of which around 10,300 are rental homes owned by the company. The occupancy rate for these rental homes was reported at 94.4%. The demand for affordable housing remains strong, especially in the current economic climate where high mortgage rates and low inventory make traditional home purchases less accessible for many families.

Attractive rental rates compared to traditional housing

The rental rates for UMH's manufactured homes are notably lower than those of traditional housing options. The company has been raising rental rates by approximately 5% to 6% annually. In the three months ended September 30, 2024, rental and related income increased by 8% to $51.9 million, compared to $48.1 million for the same period in 2023. This increase reflects both the steady demand for rental homes and the company's ability to maintain competitive pricing against the backdrop of rising home ownership costs. The average rental home occupancy in their communities increased from approximately 9,300 homes in September 2023 to 9,700 homes in September 2024, showcasing a 4% growth in occupied rental homes.

Strong community amenities and living conditions

UMH Properties emphasizes community living by offering strong amenities and well-maintained living conditions in its manufactured home communities. The company focuses on improving community living conditions, which enhances the overall value proposition for residents. For instance, as of September 30, 2024, the company reported a community Net Operating Income (NOI) growth of 11% for the nine months ended September 30, 2024, reaching $88.6 million, up from $79.7 million in the previous year. This growth can be attributed to better occupancy rates and the addition of rental homes, which directly contribute to enhanced community amenities.

Metrics	Q3 2024	Q3 2023	Change (%)
Rental and Related Income	$51.9 million	$48.1 million	+8%
Community NOI	$29.4 million	$27.5 million	+7%
Occupied Rental Homes	9,700	9,300	+4%
Occupancy Rate	94.4%	94.0%	+0.4%

Through these value propositions, UMH Properties, Inc. effectively addresses the growing need for affordable housing while providing attractive options that are competitive in price and community quality.

UMH Properties, Inc. (UMH) - Business Model: Customer Relationships

Focus on Tenant Satisfaction and Community Engagement

UMH Properties, Inc. prioritizes tenant satisfaction and community engagement as central elements of its customer relationship strategy. As of September 30, 2024, the average occupancy rate for its rental homes was 94.4%, reflecting a 40 basis points increase from 94.0% at December 31, 2023. The company operates 139 communities, which include 9,700 occupied rental homes. This significant occupancy rate indicates a strong commitment to maintaining tenant satisfaction through quality living environments and community involvement.

Responsive Customer Service for Residents

UMH Properties emphasizes responsive customer service to address resident needs effectively. The company's community operating expenses for the three months ended September 30, 2024, amounted to $22.5 million, an increase of 9% from the previous year. This rise in expenses is attributed to enhanced service offerings, including improved maintenance and customer support initiatives. The company plans to further invest in its staff to ensure that residents receive timely responses to inquiries and concerns.

Programs for Resident Feedback and Improvement

UMH Properties has established several programs aimed at soliciting resident feedback and driving continuous improvement. The company reported a 9% increase in rental and related income from $140.5 million for the nine months ended September 30, 2023, to $153.8 million for the same period in 2024. This growth can be partly attributed to resident feedback mechanisms that inform service enhancements and community offerings. The company actively encourages residents to participate in surveys and focus groups, which have proven beneficial in refining service delivery and community engagement strategies.

Metric	September 30, 2024	December 31, 2023	Change (%)
Occupancy Rate	94.4%	94.0%	0.4%
Number of Communities	139	139	0%
Occupied Rental Homes	9,700	9,390	3.3%
Community Operating Expenses ($ million)	22.5	20.7	9%
Rental and Related Income ($ million)	153.8	140.5	9%

Through these initiatives, UMH Properties aims to foster a sense of community among residents while ensuring their needs are met promptly and effectively. The company's active engagement with tenants not only enhances satisfaction but also contributes to its financial performance, as evidenced by the increase in rental income and occupancy rates.

UMH Properties, Inc. (UMH) - Business Model: Channels

Direct leasing and sales through community offices

UMH Properties, Inc. operates 139 communities, which include 9,700 occupied rental homes as of September 30, 2024, reflecting a 4% increase from 9,300 homes in the previous year. The company reported a rental and related income of $51.9 million for the three months ended September 30, 2024, an 8% increase from $48.1 million in the same period of 2023. The community's operating expense ratio was recorded at 43.3% for the three months ended September 30, 2024.

Online platforms for information and applications

UMH has enhanced its online presence, enabling potential renters and buyers to access information about available homes and communities. The company has experienced a 10% increase in sales of manufactured homes, generating $8.7 million from 100 homes sold in the third quarter of 2024, compared to $7.9 million from 90 homes sold in the same quarter of 2023. Additionally, the average interest rate on notes receivable increased to approximately 7.1% as of September 30, 2024.

Marketing through real estate agents and local advertising

UMH Properties engages in local advertising and partnerships with real estate agents to promote its communities. The company reported selling manufactured homes worth $24.9 million for the nine months ended September 30, 2024, which is a 6% increase from $23.4 million in the previous year. The gross profit percentage from these sales improved to 38% for the three months ended September 30, 2024, up from 33% in the same quarter of 2023.

Channel Type	2024 Performance	2023 Performance	Change (%)
Rental and Related Income	$51.9 million	$48.1 million	+8%
Occupied Rental Homes	9,700 homes	9,300 homes	+4%
Sales of Manufactured Homes	$24.9 million	$23.4 million	+6%
Gross Profit Percentage (Sales)	38%	33%	+5%

UMH Properties, Inc. (UMH) - Business Model: Customer Segments

Low to middle-income families seeking affordable housing

UMH Properties, Inc. primarily targets low to middle-income families as a key customer segment. As of September 30, 2024, the company reported an increase in rental and related income to $153.8 million for the nine months ended, up from $140.5 million in the prior year, reflecting a demand for affordable housing options. The average rental rates have been raised by approximately 5% to 6% annually across most communities, which aligns with the increasing pressure on housing affordability in the market.

Individuals looking for rental options in manufactured communities

UMH caters to individuals seeking rental options within its manufactured home communities. As of September 30, 2024, the company operated 139 communities, with occupancy rates at 94.4%, up from 94.0% at the end of 2023. The total number of occupied rental homes increased from approximately 9,300 to 9,700 during the same period. The company’s ability to maintain high occupancy is crucial, given the competitive rental market and the growing preference for manufactured homes as a cost-effective living solution.

Metrics	September 30, 2024	September 30, 2023
Total Communities Operated	139	139
Occupied Rental Homes	9,700	9,300
Occupancy Rate	94.4%	94.0%
Rental and Related Income	$153.8 million	$140.5 million

Investors interested in manufactured home ownership

Another significant customer segment for UMH is investors interested in manufactured home ownership. The demand for manufactured homes remains robust, with sales of manufactured homes increasing by 10% in the third quarter of 2024, reaching $8.7 million. The average selling price of manufactured homes has been driven by both demand and limited inventory, making it an attractive investment opportunity. The company’s strategy includes offering financing options for home purchases, which further supports investor interest.

Sales Metrics	September 30, 2024	September 30, 2023
Sales of Manufactured Homes	$24.9 million (300 homes)	$23.4 million (264 homes)
Gross Profit Percentage	34%	31%

UMH Properties, Inc. (UMH) - Business Model: Cost Structure

Operating expenses for community maintenance and management

For the three months ended September 30, 2024, UMH Properties reported community operating expenses of $22.5 million, an increase from $20.7 million for the same period in 2023. For the nine months ended September 30, 2024, community operating expenses rose to $65.2 million from $60.8 million in 2023. This increase was attributed to higher payroll costs, real estate taxes, and storm cleanup expenses.

Marketing and sales costs for homes and rentals

Marketing and sales expenses amounted to $1.8 million for the three months ended September 30, 2024, consistent with the same period in 2023. For the nine months ended September 30, 2024, these expenses totaled $5.2 million, slightly down from $5.3 million in 2023. This category includes salaries, commissions, and advertising costs.

Depreciation and interest expenses related to property financing

Depreciation expenses for UMH Properties increased to $44.4 million for the nine months ended September 30, 2024, up from $41.3 million in 2023, reflecting an increase in rental homes. Interest expenses, including amortization of financing costs, decreased to $21.4 million for the nine months ended September 30, 2024, down from $24.7 million in 2023.

Expense Type	Three Months Ended September 30, 2024	Three Months Ended September 30, 2023	Nine Months Ended September 30, 2024	Nine Months Ended September 30, 2023
Community Operating Expenses	$22.5 million	$20.7 million	$65.2 million	$60.8 million
Marketing and Sales Expenses	$1.8 million	$1.8 million	$5.2 million	$5.3 million
Depreciation Expenses	$14.7 million	$14.1 million	$44.4 million	$41.3 million
Interest Expenses	$6.5 million	$7.7 million	$21.4 million	$24.7 million

UMH Properties, Inc. (UMH) - Business Model: Revenue Streams

Rental income from manufactured homes and sites

For the three months ended September 30, 2024, UMH Properties reported rental and related income of $51.9 million, an increase of 8% compared to $48.1 million for the same period in 2023. For the nine months ended September 30, 2024, rental and related income was $153.8 million, a 9% increase from $140.5 million in 2023. The growth in rental income is attributed to higher rental rates, which have increased approximately 5% to 6% annually, and improved occupancy rates, which rose from 87.0% to 87.7% over the same period.

Sales of manufactured homes and related financing

Sales of manufactured homes increased by 10% to $8.7 million for the three months ended September 30, 2024, compared to $7.9 million in the prior year, with the number of homes sold rising from 90 to 100. For the nine months ended September 30, 2024, sales were $24.9 million, a 6% increase from $23.4 million in 2023, with homes sold increasing from 264 to 300. The gross profit percentage from these sales improved to 38% for the three months and 34% for the nine months.

Management fees from joint ventures and opportunity zone fund activities

UMH Properties also generates revenue through management fees from its joint ventures and opportunity zone fund activities. Specific financial figures related to these management fees have not been detailed in the latest reports; however, the company emphasizes its strategy to seek opportunities for acquiring manufactured home communities that require significant capital investment.

Revenue Stream	Three Months Ended September 30, 2024	Three Months Ended September 30, 2023	Nine Months Ended September 30, 2024	Nine Months Ended September 30, 2023
Rental and Related Income	$51.9 million	$48.1 million	$153.8 million	$140.5 million
Sales of Manufactured Homes	$8.7 million (100 homes)	$7.9 million (90 homes)	$24.9 million (300 homes)	$23.4 million (264 homes)
Gross Profit Percentage on Home Sales	38%	33%	34%	31%
Management Fees from Joint Ventures	N/A	N/A	N/A	N/A

As of September 30, 2024, UMH Properties continues to focus on expanding its revenue streams through strategic acquisitions and management activities within its operational framework, enhancing its overall financial performance.

Updated on 16 Nov 2024

Resources:

1. UMH Properties, Inc. (UMH) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of UMH Properties, Inc. (UMH)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View UMH Properties, Inc. (UMH)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.