The MHP I’m considering has a variety of rent prices for the 58 tenants. Rent ranges from $90 -$150. The average rent price in the area is $200. (Missouri park)
What’s my best option to ensure everyone is paying the same rent?
- Raise everyone gradually to $150 then to $200 a year later?
- Should I raise the rent to $200 after purchase?
I’m worried that $200 is going to be a huge leap for some.
Thank you in advance.
I probably wouldn’t do it in one whack, I’d plan on getting to market over maybe three years (this is assuming you’re making money with rents as-is). The $90 folks get $40/mo raises each year, not crazy. Even if they’re paying utilities $200 a month no one can complain they’re not getting a good deal
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Raising Rents-
Since you have inherited legacy residents with below market rents: Now is the time to passthrough the utility expenses to your residents in leu of of a gigantic leap to market rates.
In addition taking the utility component out of the rental equation:
- Increases the value of your MHP;
- More marketable to future tenants;
- More marketable to the next MHP owner.
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