Friends -
I have two types of homes in my community, and I’d like your input on what I can do to make more money from them.
‘New’ Homes: I have a couple of dozen mobile homes I’ve purchased and brought in. They are 1995 - 2001 3BR/2BA single-wides that I RTO for $1,000 down payment, and $550/month, or I regular rent them for $650 security deposit, and $650/month. I believe I’m at fair market pricing - these homes tend to get occupied either way in 4 - 6 weeks when they come available. RTOers, so far, have mostly stayed and paid (we 4 years into this now and have only had 2 of 15 RTO residents default). Renters turn over about every year. Either RTOing or regular renting, our typical customer for this home is a couple in their late 20s through mid-40’s with two kids. About half are RTOed, half are rented. The trend is going in the right direction as renters turn over and are replaced by more stable RTOers. We are moving toward an all-RTO community in another 3 years or so. We do have 1 Section 8 lady at $575/month. We advertise on GoSection8.com and get a few calls, but in 4 years, only this one Section 8 tenant. She pays on time, the government pays on time, she’s low-drama, and we’d like to have more Section 8 residents.
‘Old’ Homes: There are three dozen 2BR/1BA homes from the 1960s and 1970s that came with our park. These are mostly occupied by seniors. These residents are dying at the rate of 2 or 3 a year, and I get calls from relatives of the deceased saying they want me to purchase their home. I’ve purchased these homes for between $0 and $2,000. So far, we have been unable to successfully market these homes to other seniors; we advertise in the local paper and on CraigsList. (Our marketing person is about to send out mailers to churches and bingo halls.) Unable to find seniors, we sell these homes on a 1 - 2 year note for $2,000 - $4,000 to mostly really hard-up folks in their 20s - 40s (they then continue paying $200/month lot rent). A few homes have been purchased by small-time Lonnie Dealers. But the prospective residents the Lonnie Dealers produce for us are exactly the same really hard-up folks in their 20s - 40s we find on our own. There just don’t seem to be any seniors looking to live like this any more. The hard-up folks tend to stay around for a few years, and then vaporize - so far without doing too much damage to the already-beaten-up homes.
One final point: our property is in Oklahoma. Homes do really move around here quite a lot. We’ve had homes snatched out of our community (both ‘old’ and ‘new’) in a matter of a week if we don’t hop on them and buy them. Mobile homes in this state are truly ‘mobile.’
So my questions are:
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How does my pricing and turnover compare to yours?
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We have 4 remaining vacant lots. Would you fill these with ‘Old’ or ‘New’ trailers.
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Do you regular rent homes at all? Or just RTO? Is our $100/month spread between RTO and regular renting enough?
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Any other thoughts? What would you do differently?
Thank you,
-jl-