My husband and I have rented SFH, but are buying out first MHP. My husband’s concern is how to manage it out of state. Do you prefer on-site/off site managers? How often do you travel to check -up? Can you offer your top 3 tips for managing out-of-state parks?
On site is best but I have one off site manager who is working out well. I go to my parks about twice a year. But I am always in touch and am on top of things.
Tip 1: Move the rent collection from a drop box to some other method such as having them pay to a bank account. The problem of an on site drop box is if they suddenly quit or end up in the hospital (both have happened to me) at the end of the month, you could find yourself in a bad way. You want rent collection to be independent of the manager.
Tip 2: Always have a plan B for park manager.
Tip 3: Sell off your POHs. That eliminates a lot of issues and makes management from afar easier.
Bonus Tip: Keep a list of issues in the park as they occur. And go back over them from time to time to see if there are any unresolved ones that you got side tracked from – there always are some (“Oh crap, we never replaced the reserve lift station pump”).
Those are VERY helpful! Thank you for the thoughtful reply! That was one thing we are trying to find was a park without many POH. Has it been difficult to sell them with renters in them?
This is the crux of the problem the industry faces. Used homes are hard to finance. You have to sell them cheaply enough that people can afford them. New $60k late-model $40k late 90’s $20k (let’s say) all the way on down to 1980’s and 1970’s original HUD-code stuff.
The customer may be able to buy it cheap but they still have to pay the lot rent. Say $700 is rental and $350 is lot rent. How do they purchase? Take over the maintenance and pay … something … over time . . . it’s a mortgage. Have to pay all at once? Keep $700 per month but wink wink it’s yours after [you take over maintenance]. Looks like a mortgage when things go bad. If they stop paying, you are in the same place you’d be if you were renting it to them for $700. Looks like rent when things go bad. There’s really no difference between POH or TOH if the tenants are not paying the lot rent, because if they can’t afford the lot rent then they can’t afford to keep their TOH and you’ll be stuck with it as a POH. After waiting for legal proceedings, etc. Foreclosure and Eviction and UDAAP and Oh! The Risk!
Tip #1 - Consider that it may be better to run straight rentals of POH, and “collect” and “dispose” of the rental units as you have to/are able to. You have more control over who is in and who is out. In exchange you get the maintenance responsibility. These things do depreciate.
Tip #2 - Demand cures a lot of woes.
Tip #3 - all deals have warts.
Yep – Once there was a perfect deal but the seller knew it so he raised the price and then it was no longer perfect.
Have a competent person at the local level ( seems obvious but sometimes you might need to pay a couple bucks more and it may be worth it in the long run )
Only accept online payments or mailed in payments ( i.e. randys tip but you will have other issues like lost in the mail and delays)
Im pretty small and my parks are smaller but the phone to the parks go to a centralized manager who may not be local. Reasoning being i only have to worry about 1 person answering calls and not 3 ( then they can coordinate issue with person at the property level ) .
Be in a good market where you can have access to many a vendors, not just joe the plumber
Try and stay out of the home business if possible ( obvious I know but its fewer moving pieces…)
Have a redundancy system in place. ( i.e. not two managers but say you have a manager and then someone else who picks up the park weekly for a small credit) that way you have back up built into the whole system and at least can be notified if person 1 doesn’t catch something or falls off the deep end.
#1 tip would be to purchase Park Place by Tony Ferris. He outlines the methods he used to manage over 1,000 lots while he travels and lives however he chooses. I have no vested interest in promoting his book, but it will answer all of your questions
Thanks for sharing. I went ahead and bought it, was a quick read, maybe less than a couple hours. Probably a good read for anyone looking to do this type of scenario. I would do a handful of things different but I’m sure you can get some value out of it.
Thanks for the info! Will look into this!