Thoughts on the home sales model


#1

How do you treat home sales as a profit center? Are you looking to make a few bucks, break even, or take a loss on the home to get a good tenant?

Clearly this model will differ by the market a park is located in

I was talking to a group that treats it like a profit center and always wants to make a few dollars on a home, but my opinion is that if you have to sell a home for even a $10k “loss” is a net gain due to the long term impact on cash flow and property value


#2

We have moved in 5 models over the past few years – three we sold for breakeven cost. (Including set up, shed etc.) The others two would have been priced above the market, so we rented them. When they come vacant we will sell them and should make money on both.


#3

I think it’s largely dependent on your market. If housing prices are high and/or supply is low you should be able to sell them without taking a loss and strive to make a profit. It also depends if the current standard of your park encourages tenants to make that investment. If your park is clean and stabilized maybe you could plan to price the first few aggressively and once you get some momentum adjust your margins.

Good luck
Ken Lavoie