I have a 58 lot mobile home park
which is 45 min Nort East of IndianapolisWe have 7 park owned homes that are rehabbed and have been
on the market as rent to own contracts.
We have been asking 10% deposit ( fro
example : around $ 2,400 and $600 rent for a 3b/2bath double wide, however
lowered the deposit to $1,200) . My
rents are lower than more parks and the apartments for rent. Median household
income is $35,232 and Family Median Income is $45,628. We have showed the homes many times but hardly can find people
that will qualify. They most of the time do not have the deposit or income is
flaky…
I want to be able to get the homes off of my hand ASAP and
yet do not fill the park up with people that I will need to evict in 3 months. Is it the time of the
year that makes the renting slow or Is it asking for a 5 to 10% deposit killing me? Per my manager who
manages also other parks in the area ,
it is common practice to ask for 10%
deposit, he thinks we are not attracting qualified renters. We are only
advertising in Craigslist for now.
The prospects that come to park seem to like homes and the
park but for some reason they do not fill out the application or do not have deposit of 10% or the income.
These are our requirements:
background check, criminal check/ 5 to 10% deposit/ their
work is their credit/ certain breeds of dogs that are not permitted / no more
than 3 dogs in a household/
What do you guys to rent your homes? I intend to hold the
park for at least 4 to 5 years. We purchased it about 6 months ago. Any suggestions will be appreciated.
You need to start all over on this plan. First of all, rent-to-own (if you are talking the classic case) is out the window under the SAFE Act. It is considered by the SAFE Act people to be a “disguised mortgage”. So you need to either sell for cash (impossible) or do a straight rental. We do a variant called rent/credit (invented by SUN Communities, I believe) that is a straight rental but also has a retention component in giving a portion of the rent towards a credit that they can use to buy the home in the future, if they want to, same as cash. Talk to your state MHA for more details on SAFE Act in your state.Second, you need to advertise in the largest metro newspaper, Craigslist and MHBay. We would never succeed if we only used Craigslist – you have not nearly enough volume of calls with it alone, in our markets. The metric for us is 3 calls = 1 showing and 3 showings = 1 rental. You need 9 calls to get one home out the door. Clearly, you need a ton of calls with as many homes as you have in backlog.Third, you need to see each of these homes and make sure that they are in a rentable condition – clean, smelling good, stairs in good shape, door lock that opens, etc. The yard should also be well-mowed and free of debris. Even the greatest showman in the world can’t rent a home if it looks or smells horrible.Fourth, you need to mystery shop your manager. By phone and in person (hire someone to do the in-person). No point in sending them customers if they do a terrible job of selling – or don’t even show up for the interview.Fifth, you need to comp every home in the market you are the absolute expert on mobile home pricing. You can’t get anywhere if you are above market. You may also find that you need to reduce your rent and/or move-in cost. If so, do it immediately. You are burning money with an empty house - better to get it out the door at a lower amount than sit idle forever.Sixth, only when you have all of the above working on all 8 cylinders do you unveil your secret weapon: direct mail to apartments. Everyone hates class B and C apartments, and wants to move to a mobile home park. We have bought parks with stacks of vacant homes to the roof and blown them all out the door in a couple weeks with an aggressive apartment direct mail piece. But you can only do it periodically, so don’t waste one until you have perfected the first five steps.We are in an affordable housing crisis in the U.S. The demand is gigantic, If you have homes stacking up, you are the problem, not the market. Most of the time, the problem is one simple word: manager. Remember that it’s easier to change people than to change people.
I suggest you stick to your standards and move forward with a straight sale of the homes. Stay away from renting as the class of individual that rents will not meet your requirements and would likely cause considerable damage to the homes over time.
You will be farther ahead to hang in till you find the right buyers and not take on the renting which is barley a break even venture. Keeping the homes vacant is far better than taking the risk of having bad tenants.