How much of a factor have you found home size to affect lot rent?


#1

By home size, I mean age of home along with newer more modern larger home layouts.


#2

I have found zero affect. I have some shitty, little, old flat tops and some nice, newer double wides in my parks. They all pay the same lot rent.


#3

Size and age of home have no bearing on lot rent, they rent the land at market regardless of what is on it.


#4

@Randy_CA @Greg
Thanks for the input. I’m trying to figure out why this has happened. I looked at two parks in the same town listed by a broker. One has POH at $425 a month with 30% vacancy. The other has POH at $410 a month with 20% vacancy. Then the broker tries to show upside in rents (even with the current vacancy) by comparing each park to another in the town that he says has POH at $775. The thing is, I recognized the other park. If you look at that park in the aerial google maps view, it looks like about 1/3 of the park is vacant. The top 1/3 is vacant. Switching to the street view on G maps, there are zero homes in the park. The shots were obviously taken on different days. Investigating, I saw the park was bank owned in 2012 so it looks like this was turned around recently. That’s cool, but I don’t see why they are getting $350 more for their rent. The big different I saw was that the park is all new single-wide homes.

I would think that the other parks could increase their rents, but their vacancy isn’t great. Both parks are all rentals with about 10 vacancies so not bringing in homes isn’t really the issue.

–Perplexed


#5

Google earth has a time clock historical feature where you can check the images on different years, thats a great tool to use for parks.

My initial statement would just be management ( professional versus mom and pop ). By chance section 8 on those higher rent homes?


#6

Are you talking about vacant homes or vacant lots. If homes it could have a lot to do with the management. Some operators hardly do anything between tenants and others do a lot of clean up and repair.

If it is vacant lots you are talking about, you may have noticed a fair amount of discussion here lately about the problem with filling vacant lots. It is a real issue, perhaps the biggest one in this class of RE and none of the options are all that good.


#7

@Marvel_Equity
Good call on checking the map dates. It had 2 homes in 2008 and was maybe 2/3 full in 2013.

By management, you mean like the owners or management was lazy about answering calls or showing homes or something? That’s possible, but I figure enough consumers would take initiative if they see there’s a $300 a month less cheaper product in the same town. I didn’t think about section 8. That might be possible. They were filling those lots years before section 8 was possible though.


#8

@Randy_CA
The cheaper park has about 10 vacant homes. The lots are pretty much filled. I guess it’s possible they are charging too low and the homes are vacant because they need repair.

By my limited perspective, the filling home issue seems to be a function of high enough market rents, barring a large supply of cheap used homes.


#9

That is a lot of vacant homes. I would guess they are in pretty bad shape and some are junk yard ready. If true, you would have to figure the costs of putting things right into your offer.


#10

Parks with 400 dollar rents will typically be of a different caliber than 700-800 where the higher rent parks might actually want to be lived in and lower rent parks… well drive a few and you will know :slight_smile: (not always true- just brainstorming)

Some people are motivated to get the place fixed up and up to speed while others you cant pull their teeth to let you bring in a good home. Assumptions can be dangerous here :slight_smile:

Section 8 rentals have applied to mobile homes , I’m not referring to the new ownership program. I have run across at least one park that was pulling decent rents and was all section 8 so figured to throw that out in the event thats the case here with the higher rents.