How to figure market rents?

Question

I live in CA where MH parks are around, but not very popular (about 4.5% of total residential housing). Finding the lot rents are easy enough, but how do I find what the unit itself would rent for? (I plan on buying units and selling or lease/optioning units).

I've heard that you can look to local lower end apartments and subtract 20% but that seems like a rule of thumb at best.

Marc D. · Answer

rentometer.com works well

Ken Rishel · Answer

George Allen who is considered the guru of consultants to manufactured housing community owners has a fairly complex and accurate formula for setting rents and he gives it away for free. I don't think I am allowed to put his email or phone number in this post, but his company GFA Management is listed in the Indianapolis area phone listings, and his number is also on the Manufactured Housing Institute websites under Indiana members.

George Paiva · Answer

I pull a few months of rent listings from Craigslist and use excel to slice and dice data to get Average and Median Rates.  I like Craigslist to do market analysis because its really the only ad space that is used for rentals.

I noticed realtors that list rentals on MLS take a much longer time to rent them out.  I haven't done much research on this but I bet its 2 fold.  Not setting the net wide enough by limiting to MLS and  being on the higher end of rent rates.

Josh McCullough · Answer

Call on a couple MH's that are for sale or rent and see what the payments are.

Kyle J. · Answer

They are listed on Craigslist under the Housing for Rent category.

You could also try driving through the parks looking for "for rent" signs and/or talking with the park manager.

Sunny Jo Gardner · Answer

Many park managers own units in their own parks for renting out themselves. You might try calling some nearby parks and ask if they have any units for rent or if not, what would the typical rent be?

Curtiss Brown · Answer

Hi Sean:

Although MH's are not Real Estate, some people list them as such and rent them. Hook up with a Realtor friend and have them run some possible comps.  The price that people are asking for is different than what they actually rented for and the latter is what you need for a more accurate amount. I like Kyle's idea of driving through the park, making new friends and/or talking with the park manager.

Bill W. · Answer

To sum up everyone's answers, check the local market.  There are various ways to do this, as others have pointed out, and I recommend you use a few different methods to determine a reasonable rent.

Victor Belman · Answer

Look for rentals staying in the immediate neighborhood. Compare rents in few houses in relation to number of rooms. You can check this on the web too.

How to figure market rents?

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