Just closed on my first park today.I very excited but nervous at the same time.Iam working on my leases and Iam still undecided on my lot rent price.To give some back ground on the park.40 lots 20 occupied, lot rent is 100,many old trailers that are vacant and Iam having them removed.The ones that are occupied need some attention.City of 10000,park has all city utilities,trash,water,sewer,gas,electricVery good location.All owner own trailers. Its hard to do comparables on rent because there are very few around to compare.We are about 25 miles to a city of 100,000 and parks there range for 225 to 300 and even are large park with pool and club house at 400.Ive been told by a mobile home dealer I could get 200 and other people say 175.I think I can get 200 but only when the park gets cleaned up.What Iam thinking is to go to 150 and give them 6 months go to 175 and by then everyone will see Iam pull the old trailers and start to work on the park and it will go over a little easier.Then after another year I can go to the 200.iam not so much worried about loosing trailers I have a low mortage payment and I can afford to loose a few. I think Iam dealing with the moral side of it.I know its business and I need to look at it that way but I want to be fair in the way I handle this.Back to the question.Shoud I base the lot price on what the park will be after clean up and upgrades 200 or go slow and start at 150. Any and all advice is appreciated.Thanks
I want to say congrats Kelley on your purchase; that’s awesome!
Full Disclosure - I don’t own a park yet but am actively looking.
Most of what I’ve read from Park owners has been what you said. Get a few old ones out, show the owners you are going to clean it up, raise rents part way, do more improvements and show there money is going to good use and raise again.
Good luck man!
I’d probably go to $175 straight away. Clean it up ASAP, then in 6 months go to $200. But you can also run test ads and see what rent you can actually get for rent.
Best,
-jl-
Jefferson I was leaning towards that route.Just today I talked to a lady that lives in my town and she owns a 80 lot park near houston.Iam meeting with her next week.She is will to sit down and answer questions and help me get started.I did mention about the large increase rent and she though that wasnt a good idea.I guess everyone has there reasons.Thanks for the input!