We're looking at a park about an hour from Sioux Falls, SD. On paper, the town checks every box: average 3-bed apartment rent is north of $1,300, home prices start around $200k+, unemployment is almost nonexistent, and it's a strong local economy with a healthy business base. Population is around 25,000. Rental inventory (both apartments and homes) is very tight — every property manager I've talked to confirms it.

Twenty miles away, we already manage a park in a town with nearly identical metrics, and we're getting $500/month lot rents there.

The wrinkle: every other MHP in this new town is an old, run-down mom-and-pop operation, with lot rents ranging $200-375. Only one had a vacancy — I called on it and the resident said it had just sold. It was a 1970s single-wide listed at $25k, sitting on a $225/month lot.

The park we're evaluating has lot rents at $300 and is owned by a local operator. For this to be a strong deal, we'd need to push rents to $450 over the next few years.

Has anyone been in this position — the first professional owner coming into a market where you need to disrupt the going lot-rent rate for the whole area? How did it go, and what would you watch out for?