Posted by Dave Reynolds on November 02, 2006 at 11:04:05:
Great answer Joe. It is rare anymore to have dealers put homes on your lots and sell them. I usually only see this anymore when there is a greater demand for lots and land for manufactured homes than is the supply. I do have one park in which we have a used home dealer that puts 2-3 homes in the park for resale. He does not pay lot rent and my manager became licensed as a dealer in order to show the homes. He is compensated by the dealer each time a home is sold and I typically give the purchasers some type of lot rent discounts for a year. In the last 6 months we have had about 10 homes sold and it has worked great.
Most of the time I contact local dealers and offer finders fees as Joe mentioned. One selling point I have had to entice dealers to remember my parks is that on our vacant lots we put a real estate sign which says to find your new or used home at such and such mobile home dealership and then have the dealers phone number, etc. Dealers like that Free advertising.
10 Ways to Increase the Value of Your MH Park - Posted by Dave Reynolds
Posted by Dave Reynolds on November 01, 2006 at 24:07:33:
10 Great Ways to Increase the Value of Your Mobile Home Community
Raise Rents: A $10 per month rent increase at a valuation using a 10% capitalization rate, can increase the per lot value of $1,200.
Submeter Water and Sewer and Trash: By installing water meters and billing the residents back for water and sewer and trash you are in effect increasing your bottom line. I often think this is one of the most equitable ways of to pass on expenses to the residents as they only pay for what they use. In my experience when meters have been installed the master water and sewer bill is reduced by 30-40% as your residents become conscious about the amount of water going through the faucets. Leaky faucets are fixed, toilets no longer run continually, cars are not washed every day, etc.
Enforce Rules and Leases: By enforcing reasonable rules and regulations your community will be regarded as a safe and comfortable environment. Get rid of problem tenants. If you are worried about losing the rent from one or two problem residents, consider that you may lose even more good residents and potential residents by keeping those that are causing problems and not obeying the rules.
Reduce your Property Tax Expense: Contact a company that specializes in going to bat for you with your county tax assessor to get your valuation and taxes reduced. Many states and counties base the assessed value on the purchase price. However, most mobile home parks should have a business value component that should not be taxed as property tax. These companies often work for a % of the reduced taxes thus no money out of pocket.
Reduced other ongoing expenses: Get multiple insurance quotes, evaluate telephone costs and extras, negotiate with plumbers and electricians to get a lower hourly rate, etc.
Fill vacant lots: How much is a vacant lot worth? In many cases, a vacant lot is actually costing you money to keep the grass mowed, the lot clean, and so on. If your lot rent is $200 per month and based on a simple formula that a lot is worth 60 times the monthly rent, then an occupied lot is worth $12,000. Would it make financial sense to spend $2,000 to cover the home moving costs of a potential resident? I believe it does. Other incentives I have used include, free or reduced rent for the first year or two, free installation of new skirting, free steps and decks, and the list goes on. Be creative and stay ahead of your competitors. It is much more effective to come up with 50 ways to market to one customer rather than 1 way to market to 50 customers.
Buy homes for Resale or Rental. Buying used homes and placing them in your community for resale or rental is another way to drastically increase the value of your community. As mentioned before, each time you fill a vacant space, the value of your park increases. As a community owner you have an advantage over most mobile home retailers in that you do not need to make a profit on the sale of new and used homes. If you profit by $12,000 per space in equity each time you add a new home, you can sell the homes at breakeven and be way ahead.
Increase the Curb Appeal: Encourage residents to clean up their yards and property. Hold clean up days on a monthly basis. Have new and attractive signs installed at the entrances. Repair roads and maintain adequate street lighting. Have monthly rent discount incentives to the residents for things such as: Property of the month, most improved property, etc. Additionally, financing for your residents such things as new skirting, paint, wood siding, and other outside improvements can get the homes looking better as well.
Add additional income sources: If you have some vacant land, consider adding some mini storage units, or fence it off and offer storage for RV’s, Boats, and extra automobiles. If you have highway frontage, look into placing billboards or selling easements to billboard companies. Look into getting Cable TV or Wi-Fi for the entire park and in doing so, your residents will get a break on these costs and you should be able to profit as well.
Dedicate streets and utilities to the city. Although is not too common for established communities, if you can talk your city into making this happen, you just reduced your exposure to street repairs, utility repairs and metering.
Don’t know if the original took or not so I will repeat. Great post. Very timely since I am looking at purchasing my first MHP. It is new and has several empty pads with tons of room for expansion. How can I attract a Mobile Home sales company to place trailers or modulars for their sale at the location thus not draining my cash. Any thoughts?
Thanks
Tom
This is very timely as I am looking into my first MHP. It is new and has a lot of empty pads. I was wondering if Mobile Home Sales companies would be interested in placing Trailers or Modulars on site for sale (by them) to fill this void and not draining my cash flow. Any thoughts?
Re: 10 Ways to Increase the Value of Your MH Park - Posted by Joe C. (AR)
Posted by Joe C. (AR) on November 01, 2006 at 21:42:35:
Sometimes they will. It depends alot on the dealer and what their situation is. Floor planning (the financing a dealer has on his inventory) can be very restrictive. Most, if not all, require inventoried homes to be at the dealer’s location. Insurance and the potential for vandalism are other considerations. It may be easier to work deals on trade-ins, or with movers who generally know of used homes that must be moved or owners who just want out but are upside down. How about becoming a dealer for some manufacturer and using your park as the sales lot? There are a lot of opportunities to be creative. Ask yourself, “who has a problem that I can help solve?” and "who would benefit as much as I would from having lots to put MH’s on. Of course the park has to be desirable to entice these “partners”.
Another approach is to entice MH salespeople to direct their buyers to your park by offering a “finder’s fee” of $200-$500 cash, for every new home and tenant they move into your park. 2-3 months lot rent is a cheap price to pay to fill empty lots.
Re: 10 Ways to Increase the Value of Your MH Park - Posted by bill h
Posted by bill h on November 03, 2006 at 13:05:13:
Dear Tom,
I would ask the seller of the park to lease back the empty lots til you can get them filled or for a year or so, whichever comes first.
This has worked with empty apartments for me and I’ve heard of it working on commercial buildings as well.
Just my 2 cents! Bill H (TX)