As a mobile home park owner, effective management is essential to the success of your business. With proven management systems in place, you can increase rent collections, maintain high occupancy rates, ensure a beautiful park with no deferred maintenance, and facilitate great communication from your park manager. In this article we will explore the various aspects of mobile home park management, from hiring a manager to collecting rent, filling vacancies, dealing with residents, and much more.
Hiring an Onsite Manager versus Offsite Management
Most of the time when you buy a mobile home park, a manager will be in place and working for you on day one. This can be a good thing if they are competent or a bad thing if they are not. You might find yourself in a situation where there is no manager, or you must fire the current manager and explore new management options.
When it comes to hiring a manager, one of the first decisions you’ll need to make is whether to hire an onsite manager or use an offsite manager or system. An onsite manager lives within the park and is available to handle day-to-day operations, tenant concerns, and maintenance issues. An offsite manager, on the other hand, may live outside of the park and handle management duties remotely.
There are benefits to both approaches, but many park owners prefer an onsite manager for the added level of oversight and quick response time. An onsite manager can also build relationships with tenants, which can lead to higher satisfaction and increased retention rates. Offsite management could include hiring a property management company or the use of systems developed by the park owner to handle park operations.
I personally use an on-site manager in my parks. They typically have a quick response time when you may need to get ahold of them, and I like that they see what goes on in the park at all hours of the day. Onsite managers typically only have your park to manage and tend to treat the property as their own, which can save you money and create a good-looking product.
I tried using a property management company once and found them to be very unresponsive and expensive. They would spend thousands of dollars to hire contractors to complete work that could be done for a fraction of the price. These property managers may work great for apartment complexes but most just don’t understand the mobile home park business.
Some park owners have offsite management systems where rent is mailed to a P.O. box, notices are mailed back to residents, evictions are handled by a local attorney, and maintenance is outsourced. One resident may receive a small compensation for being the onsite eyes and ears and reporting to the park owner. I don’t’ see anything wrong with this if there aren’t many park owned homes or turnaround projects, but it may require more frequent visits to the park by the owner.
Qualities to Look for in a Mobile Home Park Manager
When evaluating potential managers, there are several qualities and skills you should look for, including:
- Strong communication and interpersonal skills: A successful mhp manager should possess strong communication and interpersonal skills to build relationships with tenants and handle conflicts effectively. The ability to listen actively, provide empathetic responses, and resolve conflicts in a timely manner can lead to higher tenant satisfaction and retention rates. Along the same lines, the manager must also be fair and treat the tenants equally when it comes to enforcing park rules.
- Trustworthy: A park manager should have a high level of integrity and be able to maintain confidentiality with sensitive information. They should be transparent in their actions and decisions, and tenants should feel comfortable approaching them with any issues or concerns. There are times that the manager may have to handle cash or pay for certain expenses, so as a landlord, you want to make sure you have someone that you can trust in the position.
- Strong organizational skills: Organizational skills are essential for a mobile home park manager to manage various administrative tasks. These skills include the ability to keep accurate records, handle rent collections, and keep track of lease agreements. A successful manager should be able to prioritize tasks and manage their time efficiently.
- Pride of ownership: The manager should take pride in the appearance of the park and work to maintain it at a high level. This includes ensuring that the landscaping is well-maintained, common areas are clean, and that any maintenance issues are addressed promptly. A well-maintained park can lead to increased tenant satisfaction and higher occupancy rates.
- Knowledge of maintenance and repair procedures: The manager should have a basic understanding of maintenance and repair procedures to address common issues within the park. This does not mean that they must carry out the work themselves, but they should be able to act accordingly when there is a maintenance issue.
- Knowledge of state and local laws and regulations: While it’s not necessary for a mobile home park manager to have extensive knowledge of state and local laws and regulations when they are hired, they should be willing and able to learn to stay within the guidelines set by these authorities. This includes having a basic understanding of the regulations regarding tenant relations, evictions, safety requirements, and other important issues.
Finding a Manager for Your Property
If you’ve decided that hiring an onsite manager is in your best interest, then the next step is to figure out where to find this person. Here are some strategies to help you find the right manager for your park:
- Consider hiring a current resident: If you have a current resident who has the qualifications and experience necessary to manage your park, consider hiring them. This can be a great way to build loyalty and retention among your residents. Look for the residents that always pay on time and have the nicest, well-kept homes and yards. This will indicate that they have pride in ownership and organizational skills.
- Advertise on job boards: There are many job boards and classifieds where you can post your job opening, such as Indeed, ZipRecruiter, and even Craigslist. Make sure to include a clear job description, requirements, and compensation details.
- Use social media: Use social media platforms such as Facebook to advertise your job opening. Join relevant groups and communities to increase your reach. I find that Marketplace is a great resource to advertise in this industry.
- Advertise to local traffic: Adding a sign outside of the park can be an effective way to attract potential managers. The sign should include a brief description of the available position as well as contact information for interested candidates.
How Much Do You Pay the Manager to Manage A Mobile Home Park?
The compensation you offer your manager will depend on several factors, including your market, the size and type of your park, if the park is fully operational or a turnaround situation, and the level of responsibilities required. Here are some compensation options to consider:
- Salary plus free lot rent: You can pay your manager a salary and offer to let them live in the park for free, which provides stability and can increase loyalty. This is the most common compensation between park owners.
- Hourly rate plus benefits: You can pay your manager an hourly rate plus benefits, which provides flexibility and can be more cost-effective. I don’t use this method as it can be hard to accurately track hours, but it’s worth mentioning.
- Performance-based pay: You can tie your manager’s compensation to performance metrics such as occupancy rates and rent collections. You can also combine this with the other methods by offering incentives for selling homes or collecting a certain percentage of rent etc.
Researching average pay rates in the area and adjusting based on the unique factors of the park can help determine a fair salary. Some additional factors to consider include:
- Free lot rent plus a small salary based on the number of occupied lots is a common compensation structure. Some investors use $10 per occupied lot as a good baseline.
- If the manager handles maintenance and repairs or landscaping, they would typically be paid a little more.
- Some park owners include utilities in the compensation package.
- More compensation may be necessary if there are a lot of park-owned homes due to the increased management necessary for turnovers including cleaning, advertising, and lease signings.
- If you have a great manager, it’s a good business decision to keep them well paid and happy, but not overpaid. A great manager can make and save you a lot of money in the long run.
I’ll give you an example of the manager’s compensation in a park that I own. There are 47 occupied lots and about 10 park owned homes currently. The manager currently handles rent collections, sending notices, evictions, rule enforcement, showing and selling park owned homes, and responding to maintenance requests. She doesn’t physically carry out the maintenance requests, we use a handyman for that. She receives free lot and home rent ($700), $200 per month in salary, and her $200 electric bill is covered. She also earns bonuses for things such as selling park owned homes or assisting with new home move ins.
You should keep in mind that a park that has good systems in place does not take a lot of time to manage. In the example above it is expected that maybe 25 hours per month goes into managing that park. Once the park owned homes are sold and the residents are taught to pay on time through strict rent collection policies, the work required for mobile home park management drastically decreases. A full-time manager is not needed until you get up over 100 lots or so and even then, with good systems in place, it can seem like a part-time job.
Managing Tenants and Residents
Managing tenants and residents is an everyday aspect of mobile home park management. We consider tenants people who rent your park owned homes opposed to residents who own their own home and rent only the lot. As a park owner, you need to establish clear rules and regulations for the park that everyone must comply with. You also should have a way for tenants and residents to communicate any concerns or issues. Happy customers lead to higher satisfaction and retention rates. The following are some good management practices:
- Clearly outline the park’s rules and regulations in the lease or a separate agreement to avoid disputes and ensure compliance.
- Establish a complaint and maintenance request procedure for residents to report issues. This is typically done by having them submit their request in writing to park management.
- You could consider buying a cell phone strictly used for park business and providing this number to residents. A google voice number could also be used. This is a number that you get to choose, based on the area code, that forwards to the Google voice app on your smart phone. I use this and let all calls go to voicemail for screening purposes and then respond as necessary.
- Address disputes and complaints promptly and professionally to avoid escalation and maintain customer satisfaction.
- Implement a rent collection policy that is consistent and timely. This is also known as no pay no stay.
- Keep a record of each resident’s rent payment history, including the balance due and any late fees or charges.
- Keep up-to-date contact information for all residents, including phone numbers and email addresses.
- Maintain a copy of each lease agreement and ensure that it is signed and dated by both parties. I know some park owners who sign one lease when the resident moves in, let it expire, and continue the residency on a month-to-month basis. This is fine, but currently I renew leases on an annual basis as it gives me a clear argument to present to the resident when they break any rules.
- Collect and keep a record of security deposits for each tenant, including the amount and date collected.
- Keep track of home titles for park owned mobile homes.
- Implementing a referral program to reward current residents for referring new residents to the park or offering move-in incentives can be a good way to rent vacant park owned homes or fill vacant lots.
Finding New Tenants and Residents
Finding brand new tenants or residents for a mobile home park is usually not a problem if you are in a somewhat decent market, as the demand for low-income housing is so high. There are several effective methods to attract potential renters:
- Online Advertising: With more people searching for housing online, it is essential to have a strong online presence for your park. Use websites like Craigslist, Zillow, and Facebook Marketplace to advertise your available lots or homes. I have found that these sites will drive most of your potential customers to you.
- Local Classifieds: Local newspapers or community newsletters can be a great way to advertise your park, but I think this is somewhat dated and usually unnecessary.
- Word of Mouth: Encourage your current residents to refer friends and family to your park. Offer referral incentives such as a discount on rent or a gift card.
- Park Signage: Place signs at the entrance of your park advertising available lots or homes. Make sure the signs are visible and easy to read.
- Flyers: Create flyers and distribute them at local businesses or community centers. This is time consuming and usually not needed, but it can be an option if you are struggling to fill vacancies.
- Real Estate Agents: Partner with local real estate agents who can refer potential tenants to your park.
By using a combination of these methods, you can attract a pool of potential residents that will ensure high occupancy rates for your mobile home park.
Screening New Tenants and Residents
Screening potential tenants and residents is a critical part of the mobile home park management process. Property owners want to ensure that the people who will be living in their park are responsible and reliable, pay their rent on time, and take good care of their homes. Here are some tips for screening new tenants:
- Qualifying phone call: You want to try and qualify the tenant over the phone before going any further into the process. Ask questions like are you employed, have you ever been convicted of a crime, have you ever been evicted, do you have the money require to move in, when would you like to move in, and how many people will be living in the home.
- Credit check: A credit check will give you a good idea of the tenant’s financial situation and their ability to pay rent on time. However, this will usually eliminate most of your tenants in a mobile home park and therefore we tend to take the weight off credit checks and look at the other information below more closely.
- Criminal background check: It’s important to check if potential tenants have a criminal record. You don’t want to rent to someone who may cause problems in the park or put other residents at risk.
- Employment verification: Verify that the tenant is employed and has a stable income. This will help ensure that they are able to pay their rent on time. Typically, the standard is that they must make 3 times their monthly rent. Don’t hesitate to reach out to their employer to verify that the information that they provide to you is correct.
- Rental history: you should check the applicant’s rental history to see if they have been evicted from a rental property in the past or have a history of not paying rent on time.
- Personal references: Ask for personal references and call them to get a better idea of the potential tenant’s character and reliability.
By taking the time to carefully screen potential tenants, you can avoid problems down the road and maintain a high-quality community in your mobile home park. If you find that you can’t get any tenants to meet your standards, then maybe consider that your criteria might be too strict for your area. Remember we are providing affordable housing for people with low incomes, who may not fit in the traditional single family home renter pool.
Managing Rent Collections
Managing rent collections correctly contributes largely to the success of a mobile home park. Here are some steps for managing rent collections that are important to know:
- Setting clear rent payment policies: It is essential to communicate with your tenants about the expectations of rent payments. A clear written policy outlining rent payment procedures, late fees, and consequences for late payments can help to avoid confusion and misunderstandings. Typically rent is due on the 1st, late after the 5th, a 3-5 day notice to pay or quit is served on the next business day, and evictions are filed with the local court system following the notice period. This system trains tenants to pay on time and filters out those who are not responsible.
- Sending rent reminders: Consistently reminding tenants about upcoming rent payments can help to ensure they are paying the correct amount and on time. Establish a set schedule for sending out rent reminders, such as a week before rent is due. Include the full balance that the tenant owes including any lot fines, late fees, or past due balances.
- Offering multiple payment options: Providing multiple payment options for rent payments can make it easier for tenants to pay on time. Options such as online payments, automatic bank drafts, and mobile payment apps can make it easier for tenants to make payments on time. The downside is that this adds to the complexity of tracking incoming revenue. The old fashion rent drop box continues to work great, but I advise you not to accept cash payments. It is an accounting nightmare and collecting large amounts of cash can put the manager at risk.
- Enforcing late fees and consequences for late payments: Enforcing late fees and other consequences for late payments can help encourage tenants to pay on time. Charge the highest late fee that is allowed in your state. You want it to feel like a penalty and $25 just doesn’t cut it anymore.
- Evictions: Evictions are a last resort, but necessary to protect the financial stability of the park and the safety of the other residents. Sometimes your manager can handle them, but it’s never a bad idea to use a local attorney to ensure that you are following all local laws and regulations. Stick to your rent collection plan and file at the same time month over month and you should see a decline in the number of evictions you do. You will weed out all the bad eggs.
- Maintaining accurate records: Keeping accurate records of rent payments, late fees, and other charges is essential for effective rent collection management. Utilizing property management software can help to streamline the record-keeping process and reduce errors. I currently use Rent Manager, but there are a ton of others out there.
- Raising rents: I would advise you to raise rents every year at least keeping pace with inflation. Each rent raise you do will for the most part go straight to your net operating income, but it will also get the residents used to the annual increase. A good strategy is to make some low cost visible improvements to the common areas of the park before sending out the rental increase letter. This will soften the blow and show residents that you are investing back into the property.
Maintaining the Park
It is essential to keep the mobile home park clean and well-maintained to keep the residents happy and attract new ones. Here are some things to keep in mind when maintaining the park:
- Regular Inspections: Conduct regular inspections of the park to identify any maintenance issues that need to be addressed. With modern technology using a HD camera can show you a lot, but nothing beats putting your eyes on your property.
- Landscaping: Keep the park’s landscaping in good shape. Mow the grass regularly, trim hedges, and keep the trees well-maintained. Make sure to cut away dead tree limbs that have potential to break and fall. You don’t want to find yourself in a lawsuit for negligence when a tree falls and damages a resident’s home.
- Repairs: Repair any damage to the park’s infrastructure, such as broken water or sewer lines or damaged electrical systems. Running water bills can add up quickly, sewage issues can present health hazards, and unsafe electrical issues can present a hazard to the safety of residents.
- Trash: Keep the park clean by providing trash receptacles throughout the park and emptying them regularly. Also have your manager occasionally do a sweep of the park, picking up loose trash or debris.
- Common Areas: Mobile home parks may have clubhouses, swimming pools, playgrounds, and other common areas that must be kept clean and well-maintained.
- Roads and Sidewalks: Repair any damage to the park’s roads and sidewalks to ensure they are safe for residents to use. Potholes are easy to fix and can present liability issues, so just fix them immediately.
- Lighting: Ensure that the park is well-lit at night to provide a safe environment for residents. Solar lighting can be a great option here.
- Pest Control: Implement a pest control program to keep pests under control in the park.
Rehabbing Park-Owned Homes
Rehabbing park-owned homes can be a great way to increase the value of your mobile home park and attract more residents. However, it’s important to have a clear plan and goal in mind before beginning any renovations. In the case of park-owned homes, the end goal should be to sell the homes, either for cash or using a rent credit program.
Here are some steps to take when rehabbing park-owned homes with the goal of selling:
- Assess the condition of the home: Before beginning any renovations, it’s important to assess the condition of the home and determine what repairs are necessary. This will help you create a clear plan and budget for the project. It may be that the cost of rehabbing the home is too much and you’d be better off removing the home and bringing in a new one.
- Create a renovation plan: Once you have assessed the condition of the home, create a renovation plan that outlines the repairs and upgrades that are necessary. This plan should include a budget and timeline for completing the renovations.
- Hire a contractor or DIY: Depending on your budget and skill level, you may choose to hire a contractor, have your manager complete the work or do the renovations yourself. Make sure to get multiple quotes from contractors and choose someone who is licensed and insured. Look for both general liability and worker’s compensation insurance.
- Don’t go overboard: Keep in mind that mobile home customers may not have the same expectations as those purchasing traditional homes. Prioritize updates that are necessary for safety and functionality, such as repairing any holes or leaks. Consider cosmetic upgrades like painting or flooring that will improve the appearance of the home without breaking the bank.
- Market the home effectively: Once the renovations are complete, it’s important to market the home effectively to attract potential buyers. This may include listing the home on online marketplaces and holding open houses.
- Rent credit program: To make the home more accessible to potential buyers, consider offering a rent credit program where a portion of the monthly rent is credited toward the buyer purchasing the home. This can make it easier for residents to purchase the home and increase your chances of selling it quickly.
When it comes to filling vacancies, there is a difference between vacant lots and vacant park-owned homes. Here are some tips on how to effectively fill each:
- Keep the lot clean and maintained to attract potential residents.
- Utilize online listings and classified ads to advertise the available lots.
- Consider offering incentives such as move-in specials or discounts on rent for a limited time.
- Create a waiting list for potential residents who are interested in a lot if there are none currently available.
Vacant Park-Owned Homes:
- Rehab the home to ensure it is in good condition and ready to be moved into.
- Utilize online listings and classified ads to advertise the available home.
- Offer rent credit programs to attract potential buyers.
- Consider partnering with a local real estate agent to help sell the home.
Overall, the key to filling vacancies is to have a plan in place and be proactive in marketing and promoting the available lots or homes. By keeping the property well-maintained and offering attractive incentives, you can increase the chances of filling vacancies quickly and efficiently.
Develop a System for Paying the Bills
Paying bills involves paying all expenses related to running the park on time to avoid any interruptions in services. Here are some important points to consider:
- Develop a system for tracking bills and due dates. This could be a simple spreadsheet or software program that helps you keep track of all incoming bills, their due dates, and the status of each payment.
- Prioritize bills by their importance and urgency. For example, mortgage, utilities, insurance, and property taxes should be paid first to avoid any legal or financial consequences.
- Set up automatic payments wherever possible to ensure bills are paid on time. This can be done for mortgages, utilities, insurance, and other recurring expenses.
- Keep an emergency fund to cover unexpected expenses that may arise. This can help you avoid any disruptions in services or legal issues that may arise from missed payments.
- Review your bills and expenses periodically to identify areas where you can reduce costs. This could involve negotiating with vendors or finding more cost-effective solutions for certain services.
Record Keeping and Business Reports
Record-keeping and regular business reporting are two items that are required when running a mobile home park. Here are some important things to keep in mind when it comes to record keeping and generating business reports:
- Keep detailed records of all financial transactions, including rent collections, expenses, repairs, and maintenance costs.
- Keep track of all lease agreements, tenant information, and maintenance requests.
- Generate regular financial reports, including profit and loss statements, balance sheets, and cash flow statements.
- Use property management software to streamline the record-keeping process and generate accurate financial reports.
- Regularly review financial reports to identify areas of improvement and make necessary changes to increase profits and reduce expenses.
Complying with Regulations
As a park owner and operator, it is your responsibility to be aware of all federal, state, and local regulations that apply to your park. Failure to comply with these regulations can result in legal issues, fines, and other serious consequences.
Some of the regulations that mobile home park management needs to be aware of include zoning laws, health and safety codes, building codes, and fair housing laws. These regulations can vary depending on the location of the park. To ensure compliance with these regulations, it is important to stay up to date on any changes or updates to the laws. This can involve attending meetings or workshops, consulting with legal experts, and maintaining open communication with local government officials.
In general, mobile home park management should regularly inspect the property to ensure that they are doing their best to provide a clean and safe product. This can include checking for fire hazards, making necessary repairs, and ensuring that all homes and common areas are in good condition.
Final Thoughts: Mobile Home Park Management
Mobile home park management does not require a unique set of skills and expertise. From finding and screening managers and tenants to maintaining the park and complying with regulations, there are many things that a normal person with decent common sense can handle. With proper management systems in place, it is possible to achieve near perfect rent collections, high occupancy rates, and a beautiful park with no deferred maintenance.
Prioritize effective communication, maintaining accurate records, and treating tenants with respect and fairness, and mobile home park management can create a thriving community that benefits both residents and investors. Ultimately, the success of a mobile home park depends on the commitment and dedication of its management team.