Maximizing the profitability of a mobile home park doesn’t have to mean a sizable cash injection. So what are the best ways to unlock the financial rewards, and achieve the best ROI?
Selling a park for a big profit markup is all about buying at an attractive price, and then adding value to increase the park’s overall value. Many of the same tactics and tools can be used by buy and hold investors wishing to increase their cash flow and net incomes too.
Here are seven ways that an investor can add value to their MHP investment without spending a penny to do it…
Strategy #1. Check the Water
One of the easiest ways to increase net income is to eliminate waste. Wasted water costs money and is bad for the environment. Check the main water lines and meters. You may even find great savings and efficiency in smart irrigation which reduces waste and preserves curb appeal.
Strategy #2. Check the Electric
Electricity can be a source of waste or savings too. Check bills and usage for theft and waste. Look for ways to reduce community consumption. This can be more energy efficient appliances, lighting, and more. There may be local or state grants to help with this.
Strategy #3. Check the Laundry
Laundry facilities can be a great income source. Both of the above come into play here, as does income from the machines. Are they being operated profitably? Could there be additional profit and income from selling supplies; soap, softener, etc.?
Strategy #4. Raise the Rent
Raising lot rents can be one of the easiest ways to increase value and income. Make sure to check leases in advance and be cautious about ousting long term, good and loyal tenants. But most should expect rates to go up modestly every year.
Strategy #5. Increase Occupancy
Reduce vacancies and add more tenants to instantly increase income and bolster property performance.
Strategy #6. Add More Lots
Adding more lots can be a powerful way to add value and income. The more lots you have the more units, and income, and more consistent net profit will be. Perhaps there is even adjacent land which can be incorporated into your park. With good negotiation skills this may not require upfront cash out of pocket.
Strategy #7. Marketing & Positioning
Some of the most value and power to fill lots and raise rents simply comes from perception. What’s great about your park? Are you highlighting and shouting about that? Is there great fishing, proximity to shopping or beaches, great Wi-Fi, safety, or good schools? The positioning of your park property is all up to you. Some parks are very low end, and yet are just a walk from “5 star luxury” parks. Don’t be labeled. Choose your own brand.