MHPs: Raising Lot Rent During Pandemic?

Question

Hi Everyone! We are trying to sell our MHP in Hawthorne, Nevada and feel that the return could be greatly improved (and hence the appeal to buyers greatly increased) if we were to raise the lot rent. Based on our research, high demand when we advertise a spot, the fact that the park is fully leased, and input from locals, we think our current lot rent is well below market value. What are your opinions about whether or not we should try to raise the rent during the pandemic and what a reasonable increase would be? The current lot rent is $225/space (water included) and the last increase was two years ago. Thanks!

Dave Rav · Answer

I own a small MHP just outside Charleston, SC and had the same dilemma about 9 months ago.  At this point, given where we are* with the pandemic, I feel your tenants could stomach an lot rent increase. Reasons are listed below.  It would be helpful to know what "market lot rent" is in your town.  Without knowing market, I'd say at least a small bump of 10% could be tolerated ($20-22/mo = not going out to eat a time or two for the month, etc).

Where we are with the Pandemic:

• vaccines are coming online - millions have already received the vax.  More to come
• stimulus checks are here!  Many have already received theirs.  This alone can be argued to easily support your efforts to increase rent!
• people are learning to pivot, morph, and evolve to find ways to sustain and make money during the pandemic (we've been in this thing for nearly a year, and we're learning to successfully navigate)
• despite the jobless claims we are seeing, the economy as well as real estate values, continue to grow in most markets.

Andrew Thomas · Answer

My county tax assessor didn't let COVID prevent them from raising property taxes in our county.    :-/Give serious consideration to raising rent slightly (10% or so, as previously mentioned), if for no other reason than to keep current with the rising cost of doing business / higher taxes.

April Eilers · Answer

This is helpful! Thanks for the reply :).