I have a 29 unit park in north Georgia that is primarily POHs. Even though I get very solid rents due to the growth in this region, average of $1,000 per unit, I am convinced I need to convert them to TOHs. These are all older mobile homes that I plan on selling to the tenants at a fair, low price. With that in mind, how high can I keep the lot rent once the conversion is complete? The 3 TOHs I do have now pay $575 and don’t think twice. If the folks I’m selling homes to get a great deal, is there any reason I couldn’t charge $700+ lot rent? Of course I’d let the tenant know that number at the time I sell them the home so there would be no surprise. I’ve checked other parks nearby and the numbers are all over the place. Does anyone have a rule-of-thumb or some guidelines they go by to try to nail down the highest lot rent you can charge without running people off? Or is it more a trial and error type of process? Thanks!
As long as you can keep your community filled with no vacancy, there is no “too high” lot rent. Allow the market to guide your determination.
I own in north Atlanta. I think it really depends on where you are. Your lot rent sounds high to me if you are outside Atlanta. The risk is that you will get those homes back. You want to make sure your customer base is financially stable and can afford the repairs
Johnny, My park is in Braselton near I-85. Do you mind me asking your average lot rent for your park in north Atlanta? Thank you.
I would say 575 is directionally correct without seeing your park. I have done POH conversions as well and kept the existing TOH and converted POH at the same lot rent.
That is very helpful, thank you!
push the top of the market as much as u can. thats where ur value lies.