I know one of F&D’s cardinal rules is to avoid rural parks. And that has been my thesis going forward. However, I recently came across a nice park that is 80% occupied that recently added a few tenants. The park has been around a long time and has no PO homes. The owner and I have discussed and he is willing to sell, the only issue is that it is in a rural town about an hour from a major metro area. Is there any rule of thumb that people follow? Or is it case by case?Thanks
We are not opposed to rural parks – we even own some – but you have to be CAREFUL when you buy properties in smaller areas, as there is less diversity of employment and not much population moving in and out. Aspen, Colorado only has a population of 6,800 people, and we’d love to own a park there. So small can be beautiful, as long as the market is terrific. When you buy a rural park, you are really not only investing in a park, but also in that town. You have to be very positive on its future.On the park you are looking at, go ahead and do a test ad, and see what the results are. That should illuminate whether the market is deep enough to make your investment successful. Even though the park as zero POHs now, you will almost certainly get a home back dome day due to abandonment, and you have to know that there is enough demand to replace your existing tenants as those situations pop up.