I have two small parks about 1 mile apart but need to fill about 8 lots total between the two. I need to do two jobs this year. Fill the empty lots and fix the roads in each. I’m not confident either park will support buyers of brand new homes if I leave the roads as gravel but I have no way to test this assumption.
Park 2 is the bigger issue, seven empty lots, most are in a the high density section with, smaller lot size only supporting 14 x 64ish so 2/1 homes. Plus it’s a gravel road that I have to constantly grade the potholes out of. I don’t think new buyers will drop 35K on a new home sitting in this kinda crappy configuration. Poor parking, no room and dirt road. There is little I can do to fix the density issue so the only thing I can fix is the road issue, if I paved it, would it be more attractive to new home buyers or should I just assume good quality used homes to keep my expenses down and provide the best value home to my future residents?
Just looking for some ideas here, the used home market is a crap shoot, plus the costs of moving, setup and make ready are terrible these days.
I did talk to various home buyer programs like the cash program from 21st and my size doesn’t’ excite them much so I’m on my own unless someone is aware of a program I’ve not found yet.
What do the other parks in your market look like? Are they all paved roads or gravel? I think you should comp other parks, compare your rent, see if they are bringing in new homes or used, and what pricing / floor plans are like. This will help you determine what may sell in your market.
Second, what’s your lot rent and expenses? Take a look at your NOI and cap it. Figure out the value of each lot in your park. If each of your lots are worth $20,000, it may not make sense to bring in a home worth $35,000. If you can source a used home for $20,000, even if you need to give it away, you would break even due to the increased value of your park.
Lastly, why not run a test ad (or a few) on your parks and see what people in your market respond to. You may find they respond to the ad better than expected. If so, you may have an indication of what type of home you can move into your park. At the least, you will know how strong demand is, so you can determine if you will be able to move in and sell homes. The test ad will let you test the assumption if people will buy new homes in gravel road parks. You’ll see the response rate.
Without knowing the specifics of your communities, it depends on what your short/long term plan is. If you are planning on holding onto your community and are not looking to flip it, it may be worth placing new homes (if you cannot find good used homes, which are hard to find). Do not be surprised if you find buyers. One of my communities is a lower end community and has very small lots, and yet we are selling new homes between 35k-50k every year. It is very difficult for people to find an apartment that is 2/1, with a yard, no neighbors sharing walls/ceilings/floors, personal, close parking, and provides you with a home you can sell when you want to move all for less than 1k a month. Do not sell your community short. For low middle to low income families, there is rarely an apartment that can compete with a nice, small mobile home. If you advertise well (Facebook, Craigslist, etc.), you should be able to sell new homes.
Also, gravel roads are completely fine, as long as, there are no potholes. Paving is expensive, and only worth it if your roads are filled with holes or you are looking to sell your community.
Caveat, I do not know enough about your market to say more. I can only hope my opinions help you on your ownership journey. Keep asking questions and be a sponge for knowledge!