Here’s the situation: I have 1 park under contract and am negotiating with another owner. Both parks are in the same metro area (about 10 miles apart) and are on all city utilities, so I’m getting rolling on due diligence for both at this point and would like to hear if any of this info is a red flag.
Population = 105,000
Unemployment Rate = 6.2% (US = 6.3%)
Household Income = $37,000 (US = $53,000)
Median Home Cost = $120,000 (US = $170,000)
2 Bedroom Rent = $640/mo (US = $957/mo) - Is this a red flag? Seems crazy low to me, but then again I rent my basement studio for $1,500/mo.
Vacancy Rate = 15% (US = 12.5%) - Is this a red flag or still in the ballpark?
I found about a dozen nearby (within 20 miles) parks online, but could only find a phone number for 2 of them. WTF? They are all relatively small (15 to 60 lots) and the 2 I was able to contact are completely full and have no POHs. The rents at these 2 parks are on par with the parks I’m looking at (mid $200 lot rent/mo + water/sewer). Also talked to a MH dealer and he said they hadn’t moved any homes into parks for a few years, but had put about 1/month on land. He said the parks stay pretty full and one of the nice ones close in to town has a waiting list.
Will start running a test ad on Friday to get a feel for demand. In the meantime, I would appreciate any thoughts/concerns you might have about the info above. Personally, I’ve always lived in pretty big cities like DC and LA, so these smaller places are out of my comfort zone.
Appreciate your thoughts, thanks!