The collections process is weekly and is only done with checks or money order.
I’ve heard that the “squeaky wheel gets the grease,” and the manager is indeed squeaky. Even so, much of the collections must be written down such that the park is barely making a profit.
We anticipate this will decrease when tenants all own their own homes (just asked another question on renter-tenant conversion). In the meantime, what are some ways you found effective at handling this? Evictions are currently done when renter doesn’t pay, but this is expensive so we let it slide if the renter comes up with the money during some grace period.
Is this a fixable problem?
Let’s start off with the basics. For the park to work you need to 1) offer a terrific value 2) market that terrific value so you get 10 people a week wanting to move in 3) enact no pay/no stay to get those who can’t work under the guidelines of paying rent to leave and be replaced by those that can.
When you talk about a weekly rental park, I immediately think of a park that is not very nice. If that’s the case, you are attracting customers who are living there as a last resort, not because they want to. That’s a bad position to be in, as you are going to have a revolving door of residents.
Figure out what you have to do to create an “insanely great value” – the combination of quality and price. Don’t shoot for just being cheap. You want to be of enough quality to attract residents who are employable and enjoy living there.
On the collections side, remember the old adage “it’s easier to change people than to change people”. You are trying to find residents who believe in paying their bills. Probably 50% of everyone who moves in might lack that skill. You can either re-train them through evictions, or let them move down the highway if they can’t follow such basic life skills.
We have never had a park that could not have the collections problems tamed but ONLY when it is combined with making the community a nice, safe, clean, attractive place to live that the residents can be proud of.
I would also consider changing over to a monthly collections system instead of weekly. To me, weekly attracts the wrong sort of customer (typically people who are so irresponsible that they can’t save up for rent, so they live life one day at a time). That alone may be scaring off decent customers, as it is very rare and a little alarming to most people.
What is the quality of your park and homes like? Are the other parks doing weekly rentals?
The park is definitely not as nice as, say, Liberty Commons in Urbana. There are a lot of single moms, some potholes in the street. There are some stumps (I know, a no-no) and about 1-2 trees per lot. The roads are wide, but not in great condition. It looks like a B- or C+ park, in my opinion.
The other parks collect payments monthly. The other parks are much nicer; they’re also more expensive. Of course, they’re mostly tenant-owned homes over there.
We definitely want to edge up to their quality, but remain under their price range.
In addition to changing over to monthly collections, would converting renters to tenants help solve the collections problem as well as improve the quality of our park through pride of ownership?
Our plan of attack to create great value for the tenants is to:
- Change park name
- Add signage & lights
- Remove debris
- Fill potholes
- Fix skirting on homes (all white vinyl right now, just some holes in a few homes)
- Clean outside of the rented homes
- Sell the homes to the tenants. But how?