“If you own a Mobile Home Park and you rent out your Park Owned Homes, what is your process once you get multiple Prospective Tenants?”
“How could we communicate to the Prospective Tenants the supply / demand equation (low supply / high demand)?”
We have a specific process that we use to obtain Prospective Tenants.
Our process is as followings (We do not have an onsite office.):
1.) Advertise On Craigslist With Lots Of Pictures & Lots Of Text / Ask Prospective Tenants To Respond Via Craigslist Email
2.) Respond Via Email To Prospective Tenants With Specific Initial Questions (NOT An Application) To Answer
3.) Once Prospective Tenant Answers Initial Questions Respond Via Email With MHP & Mobile Home Lot Address / Ask Prospective Tenant To View The Area, The MHP & The Outside Of The Mobile Home
4.) If After Viewing The Area, The MHP & The Outside Of The Mobile Home, The Prospective Tenant Is Still Interested We Then Schedule An Inside Viewing
5.) Only After The Prospective Tenant Has Viewed The Area, The MHP, The Outside Of The MH & The Inside MH Do We Provide An Application To A Prospective Tenant With A $25 Application Fee (Non-Refundable)
6.) We Only Process One Application @ One Time Per Mobile Home
The issue is during Step #6.
We have a huge demand. Hundreds of people will inquire about one MH Rental.
The Prospective Tenants do not understand how much of a demand is out there. They do not understand how the supply is low and demand is high.
My Husband just went to MHISC (Manufactured Housing Institute Of South Carolina) conference where they discussed Fair Housing.
We desire to follow the law.
How could we communicate to the Prospective Tenants the supply / demand equation?
Many Prospective Tenants feel like they are being put off.
However, in reality we can only rent what we have.
With demand like this to stop wasting your time I would put the application process and fee at the top of the list before you show any part of the home whatsoever. I assume you’re taking very detailed photos inside and outside so there really is not a huge need to show these to people who may not fit your criteria anyway - such as the Saint Bernard owner that is a recently convicted sex offender, for example. This way you can weed out the tenants that are not serious and can focus on those willing to submit the fee and meet your background / financial criteria.
I would just have very detailed instructions to email, snail mail, or fax (do people do this anymore?) the application to your contact info. Let the phone go to voicemail to avoid wasting your time talking to people who cannot follow your plain and simple instructions to fill out the application and return it to you with the fee. I use an app called “burner” that sets up a temporary phone number for things like this. Once I have filled the vacancy I “burn” the number and get rid of it. 5 dollars well spent.
I don’t know SC law specifically, but in my state if you have a reasonable approach to process the application then you are okay. “Dear Sir / Madam, please be informed we have received your application and process them on a first in first out basis. You have 3 additional applicants ahead of you and if we do not process your application then your application fee will be refunded. Thank you for your interest in my amazing MHP.”
The thing I had to get used to is this: people will still email you asking to see the place before they apply, and you simply have to be prepared to say something to the effect of, “I appreciate your interest in the home. We are getting a large number of inquiries and only able to show the home to applicants at this time. We look forward to receiving this information and fee from you to proceed.” I set up an auto-reply in Outlook, Gmail, or whatever mail client to say this so that I don’t even need to respond. I can just go through them at the end of my day and delete them unless there is an application attached and paypal reciept. For the phone calls I have the voicemail pick up and tell them the same thing - I don’t even respond to messages. It’s just a mechanism to let them know they’re not following the process.
You might only get 5 applications in a couple weeks which may be fewer than before, but that’s still a lot and think of all the time you can spend doing more important things!
The number of responses you are receiving is far to high. It is a very clear indication that your rent level is set too low. Rental rates are established based on demand and in your case should be raised to the point that you only get 5-10 good solid applicants per add.
This will weed out most of the undesirable applicants and make your job processing much easier.
If I was getting 100 applicants I would be doubling the rent.
I would also add it might be time to start looking at doing cash only sales on your homes. We have similarly high demand in a park we own and we wait it out with a POH until we can find a cash buyer. Usually an extra week or two. This is also a good time of year for that in almost any park since our customers usually have some cash laying around from their tax return.
We have a lot of Prospective Tenants who think that we are either:
Santa Clause
/OR/
Non-Profit Organization
We have quite a few people that tell us that the are desperate. Hmmm…I do not think that the word “desperate” should be used when looking for a Home.
We have people who earn $7.50 an hour and work 20 hours a week. We do not have high rent (only $550 for an older, renovated 2 Bedroom / 1 Bathroom…which is low for our area). However, do these Prospective Tenants not realize that they might need some food or clothing or gas or insurance or something other than paying all their money for rent.
Yes, we have a ton of interest in our POHs.
However, there are only a handful of Quality Prospective Tenants.
Our Rent is on the low side.
Our Business Plan is that our MHP is still a bit rough and we want to find Quality Prospective Tenants who will stay a long time because of the lower rates.
CharlesD has the best approach to this. He gave me the phone number to one of his parks so I could listen to his VM. I’m not going to post it here of course but what he does is great. It goes straight into VM and explains the requirements, background checks, etc. I’ll listen to it again and try to type up a summary, we use it at our park almost word for word.
You need to reassess your business plan and elevate your own opinion of your community. Pricing your homes where you do is not targeting the applicants you really want. Low rents do two things, it attracts unqualified applicants and discourages higher quality individuals from applying. Quality applicants are getting the message you have a low end community and that is not where they would chose to live.
First step is getting them to apply, second step is convincing them of the direction your community is taking in the future.
Stop thinking affordable housing and start thinking quality community.
If you raise your rents you will still end up with the best quality applicants and weed out the minutia that is simply looking for free handouts. Right now your rates are turning off the higher quality applicants you are seeking.
As community owners we need to stop perpetuating the stereo type that MHCs are low end welfare/affordable housing dumping grounds.
CharlesD has pointed out it is no longer necessary to carry POH financing, the economy is changing and MHCs can be elevated to a higher economic level if …we… don’t stop it from happening.
I completely agree with Greg on this one. Your prices and what you push for largely dictate the quality of your tenant base. I want my residents to be invested in the community alongside me. So, I push for a fair value cash sale on the home and it usually produces the best applicants. These are the only types of residents you can count on sticking around for the long-term.
Can you sell every home like this? Probably not. But, every vacant home you have is an opportunity to find that cash buyer who wants a permanent place to live.
Couple of more thoughts to stay out of the courthouse:
Include the Fair Housing Logo on your applications and even Ads when possible. Also include notes that “we don’t discriminate based on age, race, sex, sexual orientation, …” Good way to start;
Be consistent in rent. If you see demand is higher and you have options, raise the rent in the next ad, not ad hoc. You can get a nasty Fair Housing complaint if you offer the unit to Joe at $650 and Julio at $700.
