New MHP - Previous owner did not require deposits

[Jordan M.]

Hi everyone. I just closed on a 23 unit mobile home park, almost all lot rentals. The previous owner did not require deposits. I'm trying to decide if I should require all tenants to provide a deposit equal to one month lot rent. I'm already giving them increase letters ($45 increase) on July 1st, effective August 1st. What I don't want is some mass exodus from the park as a result of rent increases and deposits. Keep in mind, this is very low income housing. I would give them 30-60 days to come up with the deposit. Thoughts?

[Ray Hage]

It's a bit of a tough position especially if they have been living there for a long time with the previous owner without having a security deposit. I suppose it depends. If your goal is to keep all the current tenants, it might be wise to avoid it. If the $45 rent increase + security is tough for the them, maybe you can go a little higher with the rent increase and not ask for the security. Either way, it is tough. 

I'd probably lean towards just increasing the rent a bit more than you originally planned and only for new tenants, require a deposit. That way you don't have to immediately worry about a big loss in cash flow starting in Aug.