Even though the decision making factors for a buyer to purchase a mobile home park should primarily be based upon income, expenses and cash flows, it sure doesn’t hurt to add a little curb appeal that may help a buyer accept that 5% cash on cash return and the 6% capitalization rate they are getting.
You never get a second chance to make a first impression – so your landscaping should be fresh, colorful and trimmed neatly. A little rehab or upgrade to the entrance of your mobile home park is relatively cheap when compared to the value it will have for a buyer entering your mobile home park for the first time. Even old, one star trailer parks, can always benefit from a few flowers, trimmed palm trees, edging or hedge manicuring. Cut back old hedges, trim trees, edge borders, remove weeds, and even deep thatch grass areas at the time you are considering the sale of your mobile home park. That way, by the time the listing is signed and the park hits the market, your work will be in full bloom and ready to showcase.
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I would say that your roads are probably the most expensive asset in your mobile home park and failure to routinely and property maintain them will cost you much more in value than regular patching and sealing ever could. If you are planning on putting your mobile home park up for sale you should, at a minimum, slurry seal the streets. Even if it is a band aid over cracks and pot holes, it always helps to have nice fresh black streets when an investors pulls into your community for the first time. Experienced mobile home park owners and investors will be able to determine how much work the streets will need at close of escrow or in the future so a slurry seal won’t allow you to turn a sow’s ear into a silk purse. But, it might be the decisive factor that allows you as the park owner to get the price you want and have the buyer plan for street work a couple of years down the road.
I cannot tell you how many mobile home and RV parks I have visited that were painted when they were built and have not seen a fresh coat ever since. A little bit of paint on the clubhouse, laundry facilities and the sign out front, will enhance the appeal of the property and give it an up to date look.
The Tenants Spaces
You as the owner let them get a little out of hand and now they could cost you a ready, willing and able buyer. All that junk that has accumulated on space 23 could cost you a buyer before you even get to the negotiation table. Even if you as the mobile home park owner pay for the removal of the junk, consider it a worthy investment because there are several buyers that will reject your park just because of messy spaces. Be diligent and send out those notices to get the debris out of the park and into the junk yard.
When you bring the park to market you are going to be asking the seller to pay the highest price possible and you are going to be asking a broker to market the property in the most effective way possible. Shouldn’t you as the owner put forth a little bit of time and money to make these events possible? You can be assured that paying attention to these four items will help to determine the type of investor that is interested in purchasing your park and the ultimate price that you and they decide on.