raising lot rents - Posted by Jason-OH

Posted by Don-NY on April 20, 2010 at 06:33:55:

Don’t ya just LUV the sensibility of municipal laws!

raising lot rents - Posted by Jason-OH

Posted by Jason-OH on April 18, 2010 at 07:00:12:

Hello,
I need some input on a situation I have.

I have the opportunity to purchase three mobile home lots.
Each lot has two homes on them. The issue is that the
current owner is only charging about half of what the
current rent in the area is. The homes are older and can
not be moved anywhere in the local area due to their age.
The current owner is only charging $130 per lot. The parks
in the area are $250 - $325.

If I purchased the lots should I just increase the rent to
the low end of the market or should I go gradually up over
time until they get to market.

I really don’t want the tenants to scrap their trailers. If
they didn’t want to pay and left the trailer that would be
fine with me but I have seen in the past were they get mad
and tear the thing apart and scrap all the metal. I know
that there is alway the risk of this happening. I just want
to minimize it.

Also worth pointing out, I can only have one home per lot
due to new zoning rules. If one leaves then I can not
replace it. Also if they both leave I have to redevelop the
lot to get the front home back 25 feet to meet the new
setback requirements.

Any thoughts on this matter would be appreciated greatly.

Re: raising lot rents - Posted by Greg (VA)

Posted by Greg (VA) on April 19, 2010 at 19:02:03:

You forgot to mention the purchase price of the lots and what sort of financing you think you may get or if you are paying cash.

Re: raising lot rents - Posted by Mike Scarbrough

Posted by Mike Scarbrough on April 18, 2010 at 11:51:27:

I think this situation calls for personal interaction with the tenants. Have a sit down with them individually and let them know that lot rents will be going up. Also let them know that you are interested in buying their homes if they are interested in selling and offer them a little bit above market for their homes.

I wish I could say this always works. I had a resident whose home I offered to buy who decided to tear it down for scrap, just to teach his ex-wife a lesson. (I’m still trying to figure out what that lesson for her was?!) He got half the home torn down in his rage (he started on the inside so he didn’t even get any scrap), and I had to have the rest of the home torn down and taken away.

Luckily I didn’t have the zoning issues with the home, but it still was a waste.

Good luck on this!

-Mike

Re: raising lot rents - Posted by Jason-OH

Posted by Jason-OH on April 19, 2010 at 19:15:27:

The purchase price is 6000 per lot. Each lot has two
homes on them.

I also just talked with the city today and one of the
lots in now zoned multi family and if any of the trailers are pulled I can not replace them. If they
both go I have a unbuildable lot. So I think I will
pass on this one but am still interested in the other
two. Thanks for the responses.

Re: raising lot rents - Posted by Dr. B. (OH)

Posted by Dr. B. (OH) on April 19, 2010 at 19:25:20:

Jason,
I don’t understand. If one of the lots is zoned multifamily why would it be unbuildable? Couldn’t you or someone else build a 2-family dwelling on it. Or rezone the other lots to multifamily and build a small apartment complex across all of them (if they are adjacent) Maybe convert to one parcel?

Steve

Re: raising lot rents - Posted by Jason-OH

Posted by Jason-OH on April 19, 2010 at 19:42:55:

The lots are not together.

The reason the lot would be unbuildable is that is is
too skinny to build on. I guess I could build a 14 x
70 structure on it. The lot is 35 x 150 and I need 10’
setback on the side and 25’ on front and back.