I am submitting a contract on a 22 pad MHP that currently are all POH. The rental rates are under market so there is good opportunity to increase NOI with rent rate increases. Another opportunity I see is there is a cinder block garage on the property that is not in use that has plenty of room to add some washers and dryers. None of the homes have W/D hook ups in them so I think this would be a welcome value add for the tenants. This would add additional revenue and further justify the rent rate increase. For those that have done or have thought about doing this what are the pros and cons? Any estimate of build out costs would be greatly appreciated.
On the property I managed, we had a small laundry facility, 4 machines each. The tenants loved the convenience. As did the petty thieves who felt like it was a piggy bank just waiting to be broken into. If you have number of homes without W/D hookups, I'd guess they are older? If class C tenants, you might have an issue. Security was a huge issue for us, despite making it widely known that I emptied the machines nightly. (Lived on site).
Here, another big issue was commercial water rates kept going up and up. Penalized for excessive use, (well duh, it's a laundry).
@Reid Hanley Have heard it costs more to pay the utilities and repair costs on the machines for a laundry facility in mobile home communities than it's worth. Also, there's the issue of vandalism and constant surveillance to deter questionable activity. Hope that helps!
I wanted to do the same thing myself in one of my parks, but currently the general belief is that the revenue generated isn't enough to justify work on machines (constant maintenance) and the issues it can bring with people outside of the park using it as an excuse to hang out and be up to no good.
If you live nearby and are able to fix the machines yourself it may be worthwhile (may not be best use of your time).
I'm currently exploring the idea of sheds in my parks. If I can find a way to get them made or purchased cheaply enough I know many of my tenants would be happy to rent them as everyone in a mobile home is always short on space. They don't use water and should hardly ever need fixing. Another stream of revenue from within the park.
I hope this was helpful. Always wanting to maximize cash flow within each park.
I've thought about doing this myself but at the end of the day, the business model of operating a laundry facility is vastly different than operating a mobile home park. That's why when you go to sell the property this could turn potential buyers off. Where is the garage located on the property? Could you parcel it off and transfer it to a new LLC that owns and operates the laundry facility? That way you have two assets that you could sell separately when the time comes.
see if there are companies that will come in and put in them for you and run/operate those...that way you give them a positive for tenants but you dont necessarily have the difficulties/cost to run them...you will have to pay for water/sewer probably though
apartment owners do this form time to time i know of
Thank you @c.k.ebert and @ryangroene. Both great input.