We’re looking to buy a park where tenants are paying weekly, we would appreciate any thoughts on weekly collection verses monthly collection, Thanks
There are two main issues here. There is a marked increase in administrative costs associated with weekly payments. However, the most important issue is that the quality of the tenancy that can only pay weekly is very poor. If you believe that you cannot convert them to monthly payers, then you have to decrease your price markedly. This will be a tenancy that will be moving in and out constantly and I would not be surprised if the expense ratio is 60% or more.
Adjust your price offer accordingly but do a test add to determine if you will be able to replace the present tenants over a reasonable amount of time. Price will be based only on the value of lot rent plus a minimal amount for the homes. Based on being weekly rentals I assume they are much older homes in need of a considerable amount of repair.
You should buy with the intention of converting all to tenant owned homes which will most likely require replacing all existing tenants.
Thank you for your advise!