We are experiencing high turn over within the last 2 months. Various reasons but it’s now 8 lots. We do lease to own typically and any suggestions of what “is working currently,” we would love to hear.
Are you offering specials, strong incentives? The tides are changing.
Specifically, How are you advertising fo new tenants in your parks?
Hi Amy,
Turnover hurts and is never fun.
I would start by asking yourself 3 questions:
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Are the homes poor quality and is that causing the turnover? (spend more on the rehabs if so)
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Did you just bump up rents? Are they higher than the market? (consider apartment rental rates also, if they are paying $700/month via LTO and they can rent a same bedroom count apartment for $750/month for example)
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Are your LTO’s too aggressive? Like the main goal is to get a fully TOH park right- so go with that and be willing to lose a little on the sale of the home in order to get the buyers to TOH status. We have been trying a method recently on a 100+ lot fully POH park we bought and we are converting ALL the homes to TOH vs LTO’s- we are selling the homes for $4-$6k cash in this market (every market is different) and then locking in lot rents higher than market. Market is $366/ month, we are getting $400-450 per month on the lot rent due to the insanely low price we are selling the POH’s for. This is helpful because at refinance, the best terms will come from lenders that require lower POH percentages. We didn’t sell all the POH’s this way by the way, we also did some standard LTO’s for cashflow but these all mature in 36 months and are interest free notes encouraging TOH’s sooner.
Hope this helps!
Good luck,
Andrew Keel