Maybe you’ve just acquired a mobile home park that’s in operation. The previous owner just didn’t know to price the park’s lot rent. Or perhaps you’ve simply underpriced yourself and it’s time to catch up with current pricing. Whatever the reason for your desire to increase lot rent, you’ve come to the right place.
Increasing lot rent is like treading on ice. Much can go wrong if you’re not careful. But it can do wonders for the well-being of your park. You can’t keep up with the maintenance of your park if you’re not bringing in enough income to support your team and invest in maintenance.
After you zip through today’s article, you’ll have a better understanding of what approach to take towards increasing the lot rent in your mobile home park.
How to increase lot rent in your mobile home park
Here are a few tips to keep in mind. They’ll help as you consider increasing the lot rent in your mobile home park.
Maintain a good relationship with your tenants
To begin with, it’s critical that you have a good rapport with your park tenants. If you’re treating them with respect and care, then the way to increase lot rent will be easier. We’re not saying it will be easy or that your tenants will be gleeful about it, but it will certainly be less threatening. Don’t be a tyrannical or uncaring landlord. It won’t help you at all in tenant relations.
Look up the state landlord and tenant laws
In an effort to protect tenants against unfair and reckless landlords, many states have laws in place. These laws are made to keep the tenant’s best interest in mind. Get in touch with your state. Your state may require that you give a notice with ample time for your tenant to adjust to the new rent rates. Or perhaps rental rates can only be raised after a certain amount of time has elapsed.
Each state is different. Take the time to reach out to your state government for more information. Check out this site to get things rolling.
Park procedures for raising the rent
If you just purchased a mobile home park that’s already been in operation, then a good place to start would be reviewing all the park documents. Assuming the previous owner knew what they were up to, it would be wise to check with the park manual and lease agreements. These park documents have information that will provide some proper procedures for raising the lot rent.
Offer rent control leases
Some parks offer rent control leases to tenants. In a rent control lease, tenants can sign a lease that commits them to twenty years of rent. In that span of time, the rent does not increase a penny from the price of the tenant’s first month of rent. This is a great way to make your tenant feel like they can choose to keep their rent from being raised.
Do it guilt-free
In the end, you should not feel guilty about raising the rent on your mobile home lots. Due to inflation, the consumer price index goes up about two percent every year. So in light of that, it is perfectly acceptable to see the rent price go up in a mobile home park.
The consumer price index is simply a way to gauge the cost of living. It’s what economists use to understand if the economy is undergoing inflation or deflation.
Talk to an attorney
Finally, consult with an attorney. Walk your attorney through your plans and heed his or her advice. This is the best thing you can do to ensure you’re on the right track when it’s all said and done. Even if you have the previous owner’s documented procedures, you can’t be too sure that he or she had it right.
It may be painful, but think “overall picture”
Yes, increasing the lot rent can be a painful experience for both the tenant and landlord. But there are ways to go about in such a way that is orderly and mitigates much drama.
It’s not just about business. If you can’t manage your park properly, then your tenants will suffer if they need to be evicted due to a park that was unexpectedly closed down.
How do you decide your lot rent?
Now that you’re informed on how to increase the lot rent, what do proper rates look like? What about the extra fees involved with being a tenant? For some helpful thoughts on these questions, check out our article on mobile home lot rent. Do yourself a favor and make informed decisions on how you set the cost of your park’s rent fees.