Having a vacancy in your investment mobile home is an inevitable part of the mobile home investing business if you will be renting or selling (via payments) a mobile home inside a park or attached to private land. Although this vacancy process can be thought of as an unpleasant experience, with just a few attitude and business adjustments you can continue business as usual the next time you have a mobile home vacancy.
In the start of my career I experienced an “unusually high” turnover rate of 100% from all the mobile homes I was selling with structured payments. These mobile homes were sold to buyers that agreed to pay for them monthly for up to 30 years of payments –averaging 10 year terms. I say “unusually high” turnover rate because in reality, investors starting a new career of mobile home investing with no business experience are seldom trained correctly in proper screening requirements, evaluating and managing potential tenants. Unfortunately high turnover rates are common with newer inexperienced and burnt-out landlords.
Imagine if you awoke in a 10-ton construction-style bulldozer and were told to successfully maneuver it around the construction site. Could you do it? Without proper insight and education you will likely run amuck all over the yard. This bulldozer analogy is similar to the feelings a new investor may have when it comes to screening tenants and managing tenants –no one wants a struggle. As children we were always told to be nice to others; but what about when others are not being nice to us?
Renting to high-risk, eviction prone, disrespectful, professional tenants is inevitable unless you properly screen every tenant and tenant-buyer who wishes to live inside your investment mobile home.
Use the 4 tips below to help keep your mobile home vacancies down to a minimum.
1.) Strict Application Process: Create a step-by-step process that all potential tenants must complete in full before you will agree to sell or rent anything. The process I use is a combination I have seen others use successfully. The goal of this process is to make each candidate go to great efforts to live in our investment mobile homes.
2.) Strict Application Requirements: Next time you have a free hour make a written list of all the necessary requirements a tenant must have OR not have in order for you to “trust” and approve them living inside your investment mobile home. These requirements are qualities such as; a specific minimum credit beacon score, a zero eviction history, income verification requirement, etc. Keep this list posted in your office to remind you of your business obligation when you feel yourself considering to amend a particular requirement because your heart is telling you to “give these tenants a chance.”
3.) Cash is King. At some point your heart will win out over your logical brain and you will find yourself with a tenant that is unqualified to live in your property based on the requirements you have outlined as above. At times when you are taking greater risk selling/renting to a less-than-qualified tenant, require that the higher-risk tenant fork over a higher deposit or non-refundable move-in fee to obtain a key to your property they so desire.
4.) “In Case Of” Fund: From every tenant collect their first 3-4 payments and put them aside for future vacancy, late or non-payments, and even eviction proceedings. This side fund I refer to as an “In case of fund”.
Professional tenants who take advantage and don’t pay landlords are smart at finding ways to legally not pay you. Do not rent to unqualified renters or sell to unqualified tenant-buyers. Thoroughly screen all adults, keep your qualifications tight, and keep your emotions out of the process.
Take daily action,
Photo: Bradley Gordon