Renting vs. Selling on Contract

[Matt McCurdy]

I'm seeing some softening of the contract sales market selling mobile homes in my mobile home community.  The town the mobile home community is in has a LARGE percent of tenants vs. home owners (60/40), so I'm wondering if I'm trying to force the issue by selling on contract when the tenants really just want the freedom to rent?

Currently, I have 7 mobile homes sitting vacant, so the idea of getting rent sounds great.  However, the idea of maintenance calls, risk of damage to the property, etc. doesn't excite me.  Any thoughts or ideas to make either model work the best (selling on contract or renting)?

[Roger D Jones]

Matt,

I have both types of parks and certainly the all TOH park is easier to manage but it is our mixed park with 13 POH rentals that really drives the NOI. We are lucky to be in the right market situation with that park. We also have a 24 hr/wk maintanance manager who we pay very well to keep our homes in good shape through preemptive maintenance. Even with the additional maintenance expense we still drive a 66% better NOI than if the entire park was TOH.

POH homes are not ideal but if managed right they can be very profitable.  Sometimes we have to play the hand of cards the market deals us and play the best hand we can.