You don’t build amenities if you’re a smart mobile park owner. The cost and liability aren’t worth it. But, if you buy a new park, you might inherit these amenities.
Mobile home parks are different from apartment complexes in that tenants want their own separate space. It’s the appeal of home ownership that drives people to live in parks, not the amenities. I discourage park owners from adding them as the return is rarely worth the worry.
Of course, sometimes you buy a park and the amenity comes with it. In that case, you’re going to have to maintain it—removing it would be considered a reduction of services to your tenants.
The Cost of Community Space Isn’t Always Shared
Amenities can sometimes be a good option to get people into your community, depending on your location and the type of amenity offered. Consider a common one, the swimming pool.
Now, from my experience, a pool is going to cost about $10,000 a year to maintain. If you’re in a place like Southern Nevada, Arizona, or Florida, that might be a good investment since pools are almost expected given the hot climate is hot—especially in the summer. That’s a case where they’ll get tenants interested in living in your park.
But the same isn’t true for mobile parks in Oregon and Washington where that pool isn’t likely to be used that much, especially if you also consider the liability if someone is injured and how costly they are to maintain.
Why Amenities Are Dangerous to Your Liability
Occasionally, a mobile park owner asks me about amenities that would require minimal maintenance, but improve the curb appeal of the park. Be warned, even low maintenance amenities can lead to some high risks—and a jump in your insurance costs.
One of my favorite benefits of being a park owner is that it limits your personal liability. Your tenants own their homes, so they’re responsible for them. If they’re making payments on the home, the bank is going to make sure they have their own insurance. And, even if the bank doesn’t, you’re still not responsible for someone else’s own space. The same isn’t true for common areas, though.
You own the amenities at your park, so you need to insure them. Some of the riskier amenities to avoid are:
- Pools: These are the number one high-cost amenity both in terms of maintenance and liability. Not only do you have the risk of drowning, you’re also going to have the risk of slips and falls on wet pool decks and a number of other injuries.
- Playgrounds: Fun for kids; expensive for park owners. Since the insurance company rightly assumes that the playground is going to be used by children, who are at a higher risk for injury, these can be expensive to insure.
- Clubhouses: Especially if you allow tenants to use the clubhouse for personal events and parties when there’s alcohol involved, risks are high and, potentially, so is your liability as the owner and operator.
If someone is seriously injured while using one of your amenities, the results could be financially catastrophic. That’s one thing landlords frequently overlook. Your best option is to not put them in at all. When you don’t have those amenities, you don’t have the risk of lawsuits—or the cost to maintain them. But, sometimes you didn’t put the amenity in, and instead inherited it when you purchased a park. In that case, you’re kind of stuck with it.
Amenities: An Inheritance Gone Wrong
If you bought a park with an amenity, you can’t just take it out. After all, the tenants are probably paying a rent price that accounts for the additional value of that amenity. To take it out would pretty much be a demand for them to pay more without receiving anything in return.
You’re going to need to maintain that amenity—and you need to make sure the rental price that you’re charging reflects it. That could mean increasing rental rates overall, or trying to reduce some of the expense for maintenance. Empty swimming pools when they’re not in seasonal use. Lock clubhouse doors after business hours. Above all, keep those amenities safe and in good repair.
And, don’t build anymore. Amenities aren’t going to pull in renters in the Northwest, they’re just going to cost you more in maintenance and liability. Maintain the ones you have rather than worrying about ones you don’t need. The value of these amenities rarely justifies the cost.
If you’ve inherited a park with an amenity and don’t want to deal with the hassle, give me a call or shoot me an email. I have a lot of experience running parks and know how to get the most value out of them while keeping them safe for residents. To get a fair market quote on your park, contact me today.