Using www.bestplaces.com and www.citydata.com, like @frankrolfe suggests, if I see a city with a population decrease say from 2010 till now, is that the end all be all or does it depend on “how” bad the decrease is? For instance, is there a threshold I should be keeping in mind where it would still be ok for a tiny decrease in population such as a -.07% vs a 30% decrease for example? Sorry if this question sounds confusing, I’m not sure of the best way to word it.
A stronger indicator from bestplaces.net is the rental vacancies metric for the town, which is 12.5% or so on average across the country. Under that is typically seen as strong, but even that can be misleading for some markets.
End game is that the test ad is your best barometer for demand at a certain price in your target area.
Those are the only ones I have needed, but also check Wikipedia for major employers of smaller towns or google maps.
I will usually run the test ad after a park is under contract unless it has the population or rental vacancy concerns, and would then run it for a week before the offer to see if that changes my mind.
Gotcha, thanks @jhutson I will keep that in mind.
One more question, you mentioned the “rental vacancies” stat on bestplaces.net. Were you referring to the “housing vacancy” stat or the “rental vacancy” stat? They list both.
Housing vacancy is the high level metric and rental vacancies is a subset of it. I pay attention to both but the rental one is more indicative of my plans to rent credit a home.
These metrics can be deceptive especially in towns with vacation rentals or people with second homes, hence test ad.
I totally forgot about vacation rentals and second homes. I can imagine that would definitely skew the numbers, lol. What’s your take on a MHP that’s in a tiny town of say a population size of 500? Could a park still work in a town that small if it’s close enough to a bigger city that passes all the same criteria?
I really like ultra small towns just outside metro cities that have massive growth. That’s doesn’t mean that one of these towns with a small population and minimal growth won’t work though, but you need to be comfortable with fewer phone calls, and on the flip side you might have better quality tenants. I’m not an expert on that though.
Right now I have 9 acres under contract 1000 feet outside of a small town of 1000 people. 45% growth since 2010 and outside a much larger metro area. Test ad had 7 calls per day average on weekday and 15 calls per day on the weekend for rents at 850 per month. The city has utilities at the road. The city doesn’t like MHP’s (their ordinances have prohibitive home density) but my leverage is that the county will let me put whatever I want out there since I am outside the corporate limits and state law prevails. We’ll work a compromise as part of a development agreement so that both of our interests are represented, and I can have city utilities, and trash service.
Not many will advocate development on this forum but the point is that small towns can be great whether new or existing Park.
Great info @jhutson! Thanks again, I’ll be implementing your points into my due diligence.
We own a park that is in a town of 1,900: http://www.bestplaces.net/city/north_carolina/green_level
This town is somewhat blah on Best Places. The reality is that Craigslist pulls about 50 calls a week here and our bandit signs pull about 100 additional calls per weekend. A lot of our customers have bought for cash here and we seem to get very high quality tenants. (First two tenants we put in were nurses who worked at Duke). This is probably a prime example of where test marketing is the king decision maker. If I were to look at this on face value statistics, I wouldn’t think I could sell a handyman special for $5,000 cash or pull off an $850 per month rent credit on a 4 bedroom mobile home and $650 for a 3 bed room. However, those are our price points and we get homes out the door pretty fast at those prices.
Thanks @charlesd! I definitely believe in the value of test ads. I just don’t wanna fall into a situation where I’ve passed up a potentially good deal because of the stats alone. Great example though!
How much you need to be concerned about statistics is dependant on two factors in my opinion. First if the community has POHs and second whether the community has vacancies.
If the community you are looking at has no POHs and no vacancies the statistics are irrelevant as the community is healthy and strong regardless of the location.
@CharlesD where around town do you find most effective for your bandit signs? How many do you put out and have you ever had any complaints from the Town about them? This is a great idea…
Gotcha, thanks @Greg. That makes sense.
They usually work best at major intersections near where all of the shopping is. You can also put them off of the interstate exits. Your best strategy with these is to just put them out in high visibility areas and attempt to track which areas pulled the most or the best calls. Doing this will develop a picture for you to see where the most effective locations for these signs are in your area.
Typically, we don’t have any problems with the city when we put them out. If you are worried about what the city will say, have your manager put them out on Friday evening and then pick them all up by Sunday evening. As long as the city doesn’t have to go pick them up, they usually ignore them. The “we buy ugly houses” guys have tons of these things everywhere.