New MHP Owner - What do you require of tenants?

[Trish Dobbs]

Just closed on a MHP and looking for advice from those with experience in taking over a park.  I've read in the forum some suggestions for the folks who currently pay cash, but my next question is how many of you have tenants sign leases?  Ours our currently month-to-month with little turnover.  Also, do you have them sign any agreement about park rules, expectations, etc.?  Curious what information you collect for current or new tenants? 

[Reid Hanley]

We are taking over ownership of our 1st park in 2 weeks. We are having the seller give each tenant a transition letter introducing them to our company and spelling out the following:

1. All tenants in good standing are welcome to remain but are required to sign a new 12 month lease. This is leveraged investment for us so we want the stabilized income to document to the bank.

2. How and where they are now to pay rent. That there will be no more on site collecting of the rent by us or our park maintenance man.   

3. We are implementing an increase in rent rates and are providing 90 days advanced notice on this transition letter.  

4. We are  giving them notice that we have park improvements  planned. We are not committing to  specifics or dates, but we are trying to provide some value add for the upcoming rent rate increase.

This park has been owned by the same family for 25 years. Rent rates are well below market and we don't expect much loss of tenants. There really is nowhere else for them to go at the price point we are raising to. 

Good luck!