Has anybody implemented a bonus structure for the manager to incentivize him to rent or sell POH? If they buy on a rent credit program, do you pay all of the bonus at once or pay over time? Any thoughts or ideas would be appreciated.
We pay our managers a $250 bonus for each home sold. We pay that right up front when the home is sold. However, if the resident defaults within one year, we do not pay another bonus - we just expect the manager to re-sell the home.
We also pay the bonus for anyone who moves-in their own mobile home.
Your mileage may vary,
My structure is very similar.
We do the same thing except the time period is 6 months. Maybe we should go to 1 year. I would have saved $250 today.
We also pay the same commission if a private home is brought in, although that is not as common.
We purchased a park where the prior owner was paying the manager a $500 bonus for each home sold with no timeframe tied to it and some homes had frequent turnover (every year or less). When I started asking questions and digging into the reason tenants were leaving/abandoning the homes so frequently, we found out that the contractors doing the repair/remodels were just painting over rotten siding, painting wet/rotten drywall, putting new wood pieces in holes in the sub floor (literally just put pieces of new wood into the holes in the sub floor without attaching it to any floor joists or repairing it correctly), not caulking windows or window trim that were installed, etc. When the new buyer moved in and it rained the first time, water was pouring in the windows, down the walls, buyers were literally falling through the floors, paint on the rotten siding would peel off within a couple months.
The buyers would contact the manager and his response was, “Sorry, you bought the home as is!” I was shocked when I heard the manager tell a new buyer this and then come to find out, this is exactly the reason the prior 3 tenants in that same house had left not long after buying the home. The manager admitted to selling many of the homes with known issues but didn’t care because he was getting a bonus every time he sold the home. Meanwhile the owner was losing lot rent and house payments between tenants and paid thousands of dollars to the crooked contractors to repair/repaint the home each time. HORRIBLE! Needless to say, those managers and contractors weren’t here long after we took over.
My point…if you’re an owner that pays bonuses and you have frequent turnover, you may want to look into it.
Our program is to pay bonuses for collections and bonuses for an all cash sale on a home. We sold an old home two weeks ago for $5,000 cash. I was more than happy to give the manager $500 for getting that deal done.
I am going to piggy back on this: Do you pay commissions to Real Estate Agents if they bring home owners to your park? I have many hispanic families clients that want to buy home in $60-80K range in cash. They don’t want to have mortgages or can not get a loan, and they are open to have mobile homes. I checked a couple of parks in our area, they don’t work with realtors. So, if you have parks in Dallas Fort Worth area and would like to work with realtors, please PM me. Thanks.
We have privately listed homes that real estate agents have approached us on with a buyer in mind. We provide the agent two options. We either instruct them to make arrangements with their buyer to pay their fee or we agree to raise the sale price on the home to cover the fee and then we pay the agent.
In all cases the agent has approached us prior to informing their client making it possible for us to insure we get our money regardless of how the agent decides to proceed with the purchase.
Bottom line is make the buyer pay.
To revive this topic, Is it a two-tiered bonus? Meaning, one bonus for a new resident, one for converting over an existing tenant?
I pay $300 for selling someone new into the park. I was thinking of $200 for signing an existing tenant to the rent credit program.
Does that make sense, agree, disagree???
I’d disagree, but am happy to be schooled on this topic. I’ve typed-up simple ‘you should become an owner now and save money by becoming an owner’ notices for residents. I have my managers deliver them and don’t feel that would really entitle them to any bonus. The resident is in place, the manager has not had to show the home, and delivering the paper is just the same as posting a pay-or-quit notice, which I consider part of their job.
But I would love to hear others’ experience if you’ve paid money to have your manger convert existing renters. In particular I’d like data to back up your opinion if you’ve found it improves your conversion rate to pay a manager a bonus for doing this.
That brings up a good question -
Does anyone have an effective letter to send to existing tenants?
We are requiring all homes that we sell to have a fresh coat of paint applied, along with new skirting, roof sealcoating and general cleanup of the exterior in order to bring up the appearance of the park.
So - to cover the costs of this we are requiring $1,500 down, or we’ll finance this at $125 a month for a year. This seems to be the biggest source of problems, people saying they can’t afford the down payment, even at the financed rate.
So far we’ve converted less than half the park to purchasers. Part of the issue is the run down condition of the homes, which we’re trying to counter with explaining that we’ll fix the homes or they can move into another one.
Any suggestions appreciated.
Coach62, are you saying you are requiring all existing tenants to update/renovate the exterior of their homes? And that this program is being implemented as part of the new owner’s efforts in improving the park? If so, it seems like a great idea.
Sort of. It was a 100% POH park when we bought it. Before we sell any home, we paint the exterior, sealcoat the roof and repair or replace the skirting along with any needed exterior repairs. The buyer has to pay for these repairs in the form of a “down payment” or more accurately, purchasing of rent credits.
So if an existing tenant wants to buy a home, we require $1,500 “down”, which we use to renovate the exterior. This often includes replacing some or all of the windows, or at least resealing the windows. We may also install some shutters, etc.
If it’s a new resident, we require that amount up front. If it’s an existing tenant that we want to keep, and they want to buy the home, we’ll finance the $1,500.
We’re also trying some other new stuff to bring up the park, like yard of the month contest with the winner each month getting a $25 Lowes gift card.
For residents (as opposed to tenants) we’re also offering to reimburse 50% of the cost of an orange or grapefruit tree. The theory is that people LOVE their citrus trees so it’ll help keep good residents, as well as give a sense of community.