Rising rent is becoming an increasing problem (no pun intended). How does this affect you as a mobile home park owner? Is there a way for owners of a mobile home park to address this issue? Is there a way for you to negotiate rent fees with residents?
Rising rent is no laughing matter and it’s affecting people across the U.S. It may even be an epidemic coming to a park near you.
Let’s discuss some practical ways to deal with it if indeed it is a legitimate concern.
Is the rising trend of mobile home park investments a concern?
There have been various epochs in the life of mobile home investing. At one point, they were deemed as cheap and dingy — the mobile home stigma existed with good reason.
Later on, after the HUD code came into play, mobile homes gained traction as an economical yet quality housing option. This was a good change. Gone were the days of dilapidated metal boxes.
But now there’s a new trend in mobile home park investments. According to NPR, real estate investors are taking over parks and jacking up the fees. This is a painful trend for folks looking to find affordable housing opportunities.
Regardless of the type of tenant — the one who rents the lot and owns the home, or the one who rents both the lot and the home — this trend can be a big downer.
Mobile home park residents are concerned
It’s devastating. For a mobile home owner, to move the home out of the park, it will cost them several thousand dollars. In the NPR article, one such homeowner — Terry Baker — said that surrounding parks are owned by the same big investors who bought the park he lives in. They’re trapped, so now what? What is the solution?
Baker and other residents are seeking to institute rent control measures in their state of Illinois. But unfortunately for Baker and friends, there is a ban on rent control in the state.
Solutions to the rising cost of rent
To be clear, the fact that mom and pop mobile home parks don’t compensate for inflation as time wears on does pose a problem. A new investor is going to see the incongruity and make it “right.” Otherwise, it might mean the closing of the mobile home park for good — meaning, no one will live in the park.
But to jack up the prices beyond what is reasonable? Take into account the type of mobile home residents you want on board — this might require a second thought.
And here’s why.
Understandably, empathy is important in any leadership position. With empathy in mind, you see the people you serve as being more than dollars in your pocket. They’re real people with real families, lives, and struggles.
Empathy is the main building block to the next two points that will help you with the problem of rent increase.
Now that we’ve discussed empathy, let’s talk about responsibility. It’s a sense of responsibility that ought to drive us to look at the big picture. The big picture includes your residents’ best interests, which in turn includes the park’s best interest.
If the park shuts down due to being unsustainable, your tenants will suffer the loss of their homes. If you’re not getting a return on your investment, you’re not doing yourself, your family, or staff any favors either. You have a responsibility to the various parties invested in this park.
So you have empathy and you have responsibility. You also need a bit of communication in the mix. You care about the people in your park, you also realize you need to make some tough decisions.
Instead of just jumping to a decision, why not host a public meeting? Lay out the conundrum the park is in and share your proposed solution with tenants. Give everyone a voice, engage with your residents. Sure, some will refuse to hear you out. But you may be surprised to see how many people are sympathetic to your predicament.
This mobile home park investor is doing it, you can too.
Bringing empathy, responsibility, and communication together
With these three characteristics in tow, you can work through the problem of rent. Be a listener, care, and be ready to make the tough decisions.
Consider making the rent increase a gradual hike throughout the year to help your residents. Easing into change could make the necessary increase in rent a bit more bearable.
Speaking of interactions with tenants, we have some tips on dealing with violations of park rules. It’s not a fun task, but it’s something that needs to be done.