MHP Investors: Do You Like Park-Owned Homes?

[Account Closed]

I've worked with a mobile home park firm the last few years and in my experience, most park investors don't like park-owned homes because of the high repair costs (even though you can usually rent them out 2-3 times higher than tenant-owned home spaces). Other investors prefer 50%+ POH units and have an array of strategies that justify a high POH/TOH ratio, commonly leasing them on contract to purchase to existing tenants. 

I think a large factor has to do with the age and condition of homes. Nobody wants a POS mobile built in 1951 that needs an extra $5k in capital repairs before you can rent it out, but obviously a 2005 DW that's at least B condition isn't something I would necessarily stray away from.

My question is for all the park investors out there: do you prefer a larger number of park-owned homes or tenant-owned homes? Be as general or as specific as you like, it's not a clean cut-and-dry answer for most people I think.

[James Rey]

@Michael Ablan. I agree. We have several parks and if POH we do lease options with down payments to try to convert all our maintenance just to common areas. You get the best of both worlds that way.