Struggling with Mobile Home Leasing

Mobile Home Park Investing
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Struggling with Mobile Home Leasing

Theresa P.
Member since 2018 · 23 posts · 12 votes

Hi everyone!

I recently bought a mobile home park in South Carolina and am having a hard time renting the park owned homes. The previous owner had lower standards for tenants, and would lease to anyone who applied as long as they had no prior evictions in the county the park is located. I took over and wanted to raise the standards of the park, so I put a process in place to screen tenants. The result has been disappointing. I get a lot of inquiries from Facebook (via Zumper postings) and Craigslist, but people usually fall off the grid once I tell them I'd like them to submit W2's and pay stubs. So far, it feels like we are evicting more people than we are renting to (we also inherited many tenants who have not paid rent for months). 

I'm wondering if anyone would be willing to take a look at our "apply now" page on our site and read through our steps for applicants, and give me some feedback one what is going wrong here. 

Here is what our application process is:

1) Fill out a form on our website. 

2) Go to the park and tour one of our homes. 

3) Fill out an application on Cozy.com. The $40 application fee goes towards tenants' first month's rent. 

4) Along with the application, provide me with an employer reference I can call for income verification, previous landlord reference, a copy of their last 2 pay stubs or form of monthly income, a copy of their last W-2, and a copy of some form of government issued ID for everyone in the household.

I know this is a lot, but I'm not sure what I could take out to make this application process more appealing. Any input would be greatly appreciated!

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Jim JohnsonPro Member
Rental Property Investor · Denver, CO · Member since 2008 · 355 posts · 324 votes
7y

I am not sure if your issue is not really one of demographics. 

Your town has 6,500 current residents- but that number was closer to 7,400 ten years ago. 

So the first issue is- you in a population declining market- which does not do well for holding real estate prices.

Second- over 36% live below the poverty line. They simply do not make enough to satisfy your 3x rent rule- so off the bat your now only dealing with 65% of the population. 

Next- you do not take people who have had misdemeanor or felony's for the last - 2 - 10 years. This was a bit confusing to read- but probably scares many away.

In your area your market is probably the lower 50% of the income earners. Anyone on SSI or public assistance will not receive enough to qualify... and you already take out the bottom 36%. So in your whole town you probably looking at about 1000 potential renters, and they are the top 15% of the 50% you can draw from. 

I would say- if your going to attract that client- you better have really good product, a really clean property etc.... you competing for everyone that can afford a 3 bedroom apartment in one of the nicer complexes in town. 

Do you relax your requirements- well that is one option. Or you raise the bar on the homes to attract that top part of your target market. 

My calculations do not take into account the percent of the population that have committed crimes- so that 1000 person number is probably lower but I am not sure how to quantify by how much. 

Also- if about 15% of the population moves every year- of that 1000 people- maybe only 150 or 200 will be looking in any given year. That is about 20ish new people looking each month...

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  • Toby Chandler
    Flipper/Rehabber · Spartanburg, SC · Member since 2019 · 32 posts · 33 votes
    7y

    Hi Theresa! What part of SC are you in? I'll look over your process just for kicks if you'd like. message me the site etc. and I'll give you my two cents. It looks like a lot of information you're getting but I always end up with crappy tenants so maybe you're doing it the right way. 

    2Reply
  • Jim JohnsonPro Member
    Rental Property Investor · Denver, CO · Member since 2008 · 355 posts · 324 votes
    7y

    I am not sure if your issue is not really one of demographics. 

    Your town has 6,500 current residents- but that number was closer to 7,400 ten years ago. 

    So the first issue is- you in a population declining market- which does not do well for holding real estate prices.

    Second- over 36% live below the poverty line. They simply do not make enough to satisfy your 3x rent rule- so off the bat your now only dealing with 65% of the population. 

    Next- you do not take people who have had misdemeanor or felony's for the last - 2 - 10 years. This was a bit confusing to read- but probably scares many away.

    In your area your market is probably the lower 50% of the income earners. Anyone on SSI or public assistance will not receive enough to qualify... and you already take out the bottom 36%. So in your whole town you probably looking at about 1000 potential renters, and they are the top 15% of the 50% you can draw from. 

    I would say- if your going to attract that client- you better have really good product, a really clean property etc.... you competing for everyone that can afford a 3 bedroom apartment in one of the nicer complexes in town. 

    Do you relax your requirements- well that is one option. Or you raise the bar on the homes to attract that top part of your target market. 

    My calculations do not take into account the percent of the population that have committed crimes- so that 1000 person number is probably lower but I am not sure how to quantify by how much. 

    Also- if about 15% of the population moves every year- of that 1000 people- maybe only 150 or 200 will be looking in any given year. That is about 20ish new people looking each month...

    3Reply
  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    7y

    I think you are expecting too much from someone that wants or needs to rent in a MH park.

    I'd try meeting with applicants and taking a paper application.

    Run their background check and look at their credit score, criminal and eviction history.

    You may have people that get paid cash and can't produce a w2, they may not even have internet access or a bank account.

    I think a credit score and trying to talk to a previous landlord is the screening you need to be doing.

    Collect a larger deposit to give you a bigger buffer and see if you can't find some people that will turn out to be good tenants.

    File an evictions on the ones that are behind. They will pay or they will have to find a new place to live.

    2Reply
  • Jason Merchey
    Investor · Hendersonville, NC · Member since 2013 · 754 posts · 281 votes
    7y

    I personally am banking on filling eight doors in late 2019 in the Summerville area. Let's hope I have a better time of it.

    2Reply
  • Theresa P.
    OP
    Member since 2018 · 23 posts · 12 votes
    7y
    Originally posted by @Jim Johnson:

    I am not sure if your issue is not really one of demographics. 

    Your town has 6,500 current residents- but that number was closer to 7,400 ten years ago. 

    So the first issue is- you in a population declining market- which does not do well for holding real estate prices.

    Second- over 36% live below the poverty line. They simply do not make enough to satisfy your 3x rent rule- so off the bat your now only dealing with 65% of the population. 

    Next- you do not take people who have had misdemeanor or felony's for the last - 2 - 10 years. This was a bit confusing to read- but probably scares many away.

    In your area your market is probably the lower 50% of the income earners. Anyone on SSI or public assistance will not receive enough to qualify... and you already take out the bottom 36%. So in your whole town you probably looking at about 1000 potential renters, and they are the top 15% of the 50% you can draw from. 

    I would say- if your going to attract that client- you better have really good product, a really clean property etc.... you competing for everyone that can afford a 3 bedroom apartment in one of the nicer complexes in town. 

    Do you relax your requirements- well that is one option. Or you raise the bar on the homes to attract that top part of your target market. 

    My calculations do not take into account the percent of the population that have committed crimes- so that 1000 person number is probably lower but I am not sure how to quantify by how much. 

    Also- if about 15% of the population moves every year- of that 1000 people- maybe only 150 or 200 will be looking in any given year. That is about 20ish new people looking each month...

     Wow thank you for this data. We are trying to raise the quality of the park, but it's a slow process. I think we definitely need to change the language on our requirements page as well, though I'm wondering how many people even read that far when filling out our initial form. 

    1Reply
  • Theresa P.
    OP
    Member since 2018 · 23 posts · 12 votes
    7y
    Originally posted by @John Underwood:

    I think you are expecting too much from someone that wants or needs to rent in a MH park.

    I'd try meeting with applicants and taking a paper application.

    Run their background check and look at their credit score, criminal and eviction history.

    You may have people that get paid cash and can't produce a w2, they may not even have internet access or a bank account.

    I think a credit score and trying to talk to a previous landlord is the screening you need to be doing.

    Collect a larger deposit to give you a bigger buffer and see if you can't find some people that will turn out to be good tenants.

    File an evictions on the ones that are behind. They will pay or they will have to find a new place to live.

    Really good point that people may only get paid in cash. I'm wondering if we could just confirm with their employer directly rather than collect a W2 if that would solve part of the problem. 

    1Reply
  • Rachel H.
    San Antonio, TX · Member since 2009 · 3k+ posts · 1k+ votes
    7y

    @Theresa P. You may want to look at local advertising versus online. Start with the people who live in and around the park and work from there. Good luck! 

    2Reply
  • Theresa P.
    OP
    Member since 2018 · 23 posts · 12 votes
    7y
    Originally posted by @Rachel H.:

    @Theresa P. You may want to look at local advertising versus online. Start with the people who live in and around the park and work from there. Good luck! 

     thank you!

    2Reply
  • Autumn RankinPro Member
    Rental Property Investor · Bandera, TX · Member since 2017 · 148 posts · 56 votes
    7y

    @Theresa P.   Great job on reaching out to others to take a look. That's a great first step. I agree that many do get paid in cash. the online format might be to much for such a small town. I know the smaller the town the more in person the dealings/ screenings need to be. 

    0Reply
  • Jason Graves
    Rental Property Investor · San Diego, CA · Member since 2018 · 242 posts · 234 votes
    7y

    @Jim Johnson

    How or where did you go to research population growth?

    0Reply
  • Jim JohnsonPro Member
    Rental Property Investor · Denver, CO · Member since 2008 · 355 posts · 324 votes
    7y

    Jason,

    I use several sites for offsite due diligence. In this case, frankly I do not remember. It could have been some Wikipedia, some City Data, I think I looked up crime stats, also looked up some economic data for the city, county and state. I use the chamber of commerce sites also.

    I look at historical population, I am looking for growth or at least a level population. If I see there are fewer residents now than in the past- there is almost always a housing issue of some sort.

    I look at the rental market and homes for sale data. Average prices in both, and historical days on market for the housing as well as average sales and new build info.

    I look at income averages, and the distribution of income. What percent is below the poverty line, and in that area, what is the poverty line. What is the mix of population.

    0Reply
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