I own a mobile home park and have several long-term tenants who have been paying well below market rates for years. Now that operating costs are rising; I need to implement a reasonable rent increase, but I’m concerned about tenant pushback.
Some residents have already voiced frustration & I want to handle this transition as smoothly as possible while maintaining good relationships in the community.
What are the best strategies for explaining & implementing rent increases without causing excessive turnover or resentment? Have other park owners had success with gradual increases, offering incentives / structuring communication in a way that helps tenants understand the necessity of the change?
In January I had another rent increase, the largest so far ($40 to existing tenants - new tenants that I’ve added over the last year were already charged the new amount). Prior to charging the new amount and before I sent the required 60 day notice, my manager socialized it with a few tenants. Only one tenant pushed back - this tenant is a big complainer about everything. All other tenants understood that prices go up.
In the letter I sent I mentioned the large amount of expenses we’d dealt with (thousands spent on deferred maintenance, tree trimming/removal, increased property taxes, etc.) to explain my reasoning. I had hardly any pushback following the increase. Only a few tenants (I have 80 lots with 3 empty) complained. I spoke to each of them to address their concerns - I gave them specifics about how much I’d spent and told them that I’d continue to make the community better… and that for less than $1 a day it is a great value.
I haven’t lost anyone over a rent increase - I doubt you will as long as the increase keeps your total rent at the market rate. I wouldn’t be too concerned about doing it as long as you are offering a good value and the tenants can see that.
The best strategy, is of course, not to fall behind market. In today’s dollars, I’ve found the $40 or 10% to be a fair “catchup schedule” until you can settle in to more typical inflation/market increases. This is of course offset, by what you are doing: charging market to incoming tenants, which also sets the value. From my observations, if you raise, 5, 10, 20, 30 or 40, you basically get the same level of outrage from the same tenants.
The other thing is of course, seeing dollars at work. I’d rather do moderate improvements every year during a catchup schedule than to do one big chunk at the beginning, because the appreciation fades fast.
As for legal, you just have to check if your state has any rent control guidances, and what notice is required. For example, where I’m at, there is no rent control, and provided their lease has expired, or converted to month to month, I can lawfully raise whatever I choose with a 30 day notice. But I sleep OK at night if I limit it to the aforementioned $40/10%
The key is consistency. If they expect rent to go up $10-$40 every year, as the years go on, there is less and less pushback and you get to keep up with inflation. Even if there’s a year where you were light on expenses and don’t “need” to do it, do a $15 so if the next year is heavier you can smooth it out a bit. That’s really all people want is predictability.
I think you are over thinking this issue. Make it a habit that rents go up every 12 months. The only potential pushback would be to refuse to pay the increased rent, and then you evict. It’s very simple.
Of course, you have to make sure your rent increases are reasonable, but your tenants should have ZERO input into that.
For us, it is very objective. We discuss internally what the rents should be considering competitors and inflation. Once agreed, we send a letter letting the tenants know the new amount. We have never taken a tenant’s opinion into account.
I was the local on site manager at the park I live in that has a high percentage of senior citizens living on Social Security. The park’s owner raises the rent every 4 to 5 years, by $50 at a time. This upsets many and alters people’s budgets, as many (myself included) only get small cost of living increases from the government each January. Mine was $14 a month for 2025.
I suggested to the owner to raise the rent $10 a year. In that 5 year period, he would be up to the usual $50 increase on his plan. Less push back and the cost of living increase would cover that small amount easily for seniors.
I also did a financial spreadsheet, and showed him that the $10 increase each year would produce an additional $160,000 in rental income over that 5 year period (this park had 90 paying customers) and he turned my idea down flat, thought it was terrible.
Year one, landlord nets $10/month per rental unit. Year two, its $20 (last year’s $10 and this year’s $10 increase). Year three is $30, and so on.
Guess he should stop advertising online how his realty company is the most professional and experienced managers of mobile home parks. He is not looking out for the investors. This small amount does add up eventually, and it would be nice to have extra funds for repairs and maintenance.
For those who have not had a rent increase in a long time, you may have to just do your first big increase and deal with the complaints, and then begin raising the rent $10 a month when the leases expire on the one year anniversary.
The majority of complainers don’t leave. And even if they do, they are most likely going to sell their mobile home and provide you with a new tenant anyway. Moving trailers out of parks is not cheap, and many trailers are too old too move in the first place.
I personally find it unprofessional to not adjust rents every year, then every 5 years or so pick a round number like $50 out of thin air. This is damaging to the tenants, and is not based on realty. A better approach is to review the metrics on an annual basis including the CPI, the competitor rents, and your profit margins. Using this information, you can do an analysis to determine what the rent should be. The tenants will grow to appreciate the consistency of rent increases and they will not be bombarded by huge increases that are hard to budget for after years of no increases.
We raise rents annually—typically CPI plus 2–3%.
Over my 26-year career, our increases have averaged around 4% per year.
From 2020 to 2024, inflation was high, so some of our rent increases matched or exceeded inflation. Some tenants were paying around $750 in one of my parks, while new tenants were coming in at $1,100. We gave the lower-end tenants a “catch-up” increase to $950. We lost about four residents, but the new ones moved in at the $1,100 rate. In the rent increase notice, we included the average rent for the park and the new move-in rate. This way, they knew they were still below the average even after such a large increase. If my memory serves me correctly, it was about 10 residents in a 95-space park.
Here’s the reality:
If you’re not raising rent annually, you’re holding your tenants back from keeping up with the real world.
You’re also subsidizing someone else’s lifestyle out of your pocket.
Have other park owners had success with gradual increases, offering incentives / structuring communication in a way that helps tenants understand the necessity of the change?