Hi Gang,
I am doing due diligence on a 40 space park in Southern California. It is fully-leased and there are no park-owned homes.
There is a manager on-site.
How much would you recommend paying him?
Thanks, Peter
This is an old post but I would like to ask the same question.
On the bootcamp @frankrolfe said they pay $10 per occupied lot + free lot rent. However, I am not sure if it still the case.
We have 41 lots and 29 occupied. How much should we pay our manager?
Thank you
I was just at the charleston boot camp and the rule of thumb that you stated is what we were told. This is how I compensate my manager and he hasn’t complained. If it’s all tenant owned homes, there shouldn’t be a lot for them to do, right?
Excellent question. And because my park is 100% occupied I didn’t even think about it. So I’m not exactly sure but would assume it’s per occupied lot. Hopefully someone can fill in the blank.
Can I give you guys a tip as a manager… because I am.
I am going to stand on the soapbox to show you the other side of this perspective as someone that has come in to clean up after bad managers, for two different companies, in 4 parks, in 3 different cities in WA. Not all low paid managers are bad, I am not saying that, I am jaded because I have experienced many of them, as well as many underpaid staffers that stole to make up the difference - Stihl equipment is not cheap to replace at commercial level as you guys may know.
I understand that mobile home parks are a revenue source for owners. I can appreciate that. However, two things are necessary to be aware of, if you are not 1) your residents run the show as far as keeping the majority of the park clean and picked up and their kids not being left out to roam and do damage to your things, so to mitigate issues, they should be happy with their park being safe and the staff being fair and doing things above board 2) your managers, whether you compensate them at a living wage or not, they will take a living wage from you. I have fixed what skimming managers have done too much to not bring this up, 4 sets of them. Example: manager X charging cash fees for things that were one rate then they up charged 100-200% over the rate in cash for gate keys, pool keys, parking, skimming fees for backgrounds, snatching homes out from under the nose of the park who should get first right of refusal to run through their own business to flip and resell, etc.
If you want a part time manager that is kind of there and just collects rents, $10 a lot is great with free rent and free basic utilities. If you need someone to just collect rents, you can allow your tenants to pay on line, force the change, or have them send to you at a PO Box and you don’t need a manager on site. There always are other reasons for managers to be on site. They are your eyes on the ground. If you want someone that actually does things for your park like create an atmosphere where the tenants feel welcome through events and newsletters and increases rents per law and market value and deals with the park issues directly, keeps vandalism and theft at bay, handles on site maintenance problems, marketing and flipping homes for you, and you want to obtain solid organic advertising online for your park, an office managers rate would be appropriate - which would be in the mid to high $20 range per hour plus benefits and the house and the utilities… so you aren’t cycling through managers that are working their own businesses as a priority over yours… See what I mean?
Giving the manager a true living wage for the job that they do, in your market, is fair. Going per occupied lot, is not fair unless living expenses are very low in your market, for that I can’t say because I live in a very expensive state. If there are other bennies to the job like full benefits, paid vacation, paid sick days, PTO, sales spiffs for selling homes, and lease up spiffs like apartments. Could you live on your monthly expenses on what you would pay a manager? So, it depends on what your expectations of what they do are, you have to weigh it.
You could also go percentage of the lot rent so you always have a moving number annually, cost of living shouldn’t just benefit the owner of the company with rent raises.
So the question is, do you want a part timer that just collects rent, that you could have a cloud based program do for you, or do you want someone that is there full time 40 hours a week and wants to keep up the place for you and manage other staffers, clean, and keep it maintained in the common areas for the TOH communities?
Please understand you get what you pay for and if you underpay, you have more headaches.
But also - salary - salary - salary so you can get those extra hours out of your manager when you need them to be there extra hours for events or whatever, and also place a solid tracking system of true hours, ADP is a great one with finger print technology, there is one out there with retna scanning too but that may be more than you need.
Its easy but not easy to figure out. Knowing what you expect of the manager to keep your asset up to an at market or above market standard… tricky.
So the question is, if it was a job you were walking into, with all the balls in the air that get juggled every day on site, what would be fair?
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$10 per occupied Lot seems low to me, but I guess it depends on how many lots. I heard a podcast from Park Street Partners where I believe that investment group pays $10 per TOH, $15 per POH, and a bonus of $250 per new tenant/owner.
I personally want the manager to be sufficiently motivated in increasing income and reducing expenses. my approach is to give the manager a percentage of NOI. Any other park owners using this approach?
The company I work for does that. Then all other staff members are on an hourly basis.
So. Using the $10 per pad formula, a manager in this park should get $400 per month in Southern California?
I have been watching with interest the various responses, so here are my thoughts:
First of all, I think it greatly depends of what the job description of manager is for the park. If I want them to accept rent, lease spaces, and coordinate repairs I may feel that one level of remuneration is appropriate, but what if I also want them to select and acquire homes, oversee pad development and the installation of homes? What if I want them to also developing advertising and marketing? What if I want them to sell homes? All of those add on responsibilities means I need a person with increasingly broad and deep sets of skills I’m not going to get for $10 per pad per month, unless I am willing to accept a less than competent manager.
( In actuality, I would never employ a park manager to handle most of that, because I believe there are different skill sets and different abilities involved that rarely are found in the same person.)
For a 300 site park, where the manager is responsible for everything except developing advertising, marketing programs, and sales, the $10 per pad comes closer to what most of our clients are spending if a rent and utility free home is also being supplied, everywhere but the East and West Coasts.
One might consider the actual lot rent charge as well. Are you going to pay $10 per month per pad where the lot rent is $200? If the lot rent is $800 per month, wouldn’t paying more be affordable and make more sense? The question is how much more, but cost of living differences should be considered.
In reality, one size does not fit all. If this was easy, the rewards would not be as great because everyone would be doing it.
Here’s the thing. You can have a manager that does all the stuff that you need done - project managing, marketing, sales, operations, and the rest. If they have a team under them to help with it. It becomes too much paperwork otherwise and there are not enough hours in the day. The other aspect of it is, what are the minimum educational and experience requirements and are you going to train your people . . . If there is no idea on that home front of what you expect them to know then there are more details to be worked out before you put someone on the ground. I have a staff of 5 under me, 1 sales director and 1 sales regional and 1 sales national over me, regular training, and a regional operations manager over me. I also have a team of 11 in my region that I can ask questions of and a legal team at my fingertips for all the weird stuff that crops up over time. . . Maybe not the norm. But, that is me, I was also fully trained at my previous MH employer and am grateful because that knowledge has been very very useful. I am not the norm. We cycle through managers all the time in the company I work for right now, who do not care, do not do, and are busy running their side businesses. To the owners out there, I don’t know how you find qualified people because MH is a funky niche. The original question from almost 10 years ago comes back to me though and the question that I have to ask the owners following this thread are, does anyone ask the people selling the parks what they are paying their current managers? Any one doing local research and asking around?
We use a totally different model and philosphy. We pay typically 5% of collections plus free space rent. Primarily because you get what you pay for. Sometimes we pay a little less (55+ community with basically no problems) and sometimes a little more (100+ unit all age community in a depressed area and it takes up most of my time). I cannot imagine what type of manager you would draw at $10 per space plus free rent. I would never pay that to anyone and expect much in return.
We operate in the NW in 2 states and run 6 parks for frame of reference.
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Orrenfoster, that is what the average is out here, and I can appreciate that you appreciate the work it is for managers on the ground. It’s a whole lot more to do than just collect rent and sit around. Glad to see it. 