How to Buy a Mobile Home Park: #1 Secret to Passive Income
What’s the first thing you do after purchasing a mobile home park? You've probably heard all about the passive income, cash flow, and tax benefits, but few talk about the critical steps after closing the deal.
Ready to uncover the #1 secret to a smooth transition and long-term success?
If you'd rather watch than read, check out my video where I walk you through the entire process in action! [Watch it here!]
First Steps After Acquiring a Mobile Home Park
The moment you acquire a mobile home park, the real work begins. Here's what to do next to ensure your investment thrives.
1. Notify Tenants About the Ownership Change
The first move is to inform tenants of the new ownership. In our case, we sent out a notice to all residents, letting them know we’d be visiting the park. Transparency here is key—it builds trust and ensures smooth communication from day one.
2. Meet and Greet with Tenants
We always personally visit each home to introduce ourselves as the new owners. This personal touch is crucial in creating a positive relationship with tenants. During one of our acquisitions, we took the time to meet each tenant face-to-face alongside our park manager.
3. Get New Leases Signed
Once you’ve met your tenants, the next step is getting new leases signed. We use a mobile app to simplify the process, making it easy for tenants to sign, pay rent, and communicate with us.
Leverage Technology for Smooth Management
Mobile Apps for Rent and Communication
Not all tenants use traditional banking, so we make paying rent easy. With a mobile app, tenants can pay through their phones or even at local stores using a barcode. This system not only simplifies rent collection but also provides a way for tenants to report issues directly.
Raising Lot Rent with Value in Mind
Raising lot rent may be necessary, but it’s important to handle it with care. We informed our tenants in advance that we’d be aligning rent with the area’s average. In return, we committed to adding value by addressing common complaints like road maintenance.
Adding Value with Park Improvements
Tenants had been complaining about road conditions, so we ordered 16 loads of gravel to fix the roads. Addressing tenant concerns and improving the park makes rent increases easier to digest, as tenants see real improvements.
Prioritizing Safety: A Key to Retaining Tenants
Safety comes first. When tenants raised concerns about safety issues, we immediately made it clear that unsafe behaviors would lead to eviction. A clean, safe environment is essential when you're asking tenants to pay premium rent.
The Importance of Involving the Previous Owner
Collaborating with the previous owner can make your transition smoother, especially if they have a good rapport with tenants. The previous owner in our case, who was also the town mayor, played a big role in helping us communicate the change to tenants.
Conclusion: The Secret to Mobile Home Park Success
Purchasing a mobile home park is just the beginning. By focusing on tenant communication, strategic rent increases, leveraging technology, and prioritizing safety, you’ll set yourself up for long-term success and passive income.