From BestPlaces.net I’ve noticed that the some towns may have significantly lower rental rates, but higher home prices compared to another town. I’m guessing this is related to the number of apartment units available. Am I correct that rental rates are probably more important than home prices when evaluating a park?
In that situation, I’d agree that the rental rates are more important. Another important metric is the vacancy rate of rental properties.
Yeah I was looking at a park in a city that had a 31% vacancy rate. Didn’t pursue any further.
Just keep tabs to make sure its not like vacation spot or something.
Example on a deal I tried to buy a couple years back .
Myrtle Beach shows 47.7% vacancy. Driving around that market and my other research, loved everything about it ( there were other things that killed the deal) .
All parks full, demand through the roof, test ad was crazy. So sometimes don’t take something at face value but really get a good understanding of whats going on there.
@Deleted_User_ME you’re 100% right and I should have mentioned that. If I lookup my neck of the woods (SW Florida) it shows a 30+% vacancy rate and it’s very similar to Myrtle Beach. Very high demand, everything is full, etc.
Is $700/mo for2 br apartments still a reasonable benchmark when evaluating a market?
If you’re planning to finance the park’s infill you need to know what debt service will be. Your market may or may not support a $750-$800 per month note (for example, confirm with lenders), and if it won’t you probably shouldn’t do this deal if that’s a key ingredient for your success.
In the event this is a total cash deal then it’s a subjective thing for each investor.