When people ask me for ways to get their mobile home park sale-ready, I tell them to think about it the same way you would if you were selling your own house. You wouldn’t invite a buyer over if your place was trashed, so why would you do that with your park?
I’ve seen owners overlook tons of simple maintenance items when they’re trying to sell their park. Some of these things cost very little—you don’t need to invest a fortune to make sure your park is ready to be viewed by potential buyers. In fact, most of the things you can do will cost you very little, and can really improve your chances of getting a great offer.
These are the top four tips I have for potential sellers, based on what I’ve seen in my twenty-five years of buying, owning, and operating mobile home parks.
Tip #1 – Sealcoat the Streets
Streets are the biggest expendable capital item in any park—and they make a huge visual impact. The problem is ripping up roads and redoing them costs a lot of money. But sealcoating costs a lot less—about half as much as repaving—and the sealcoating process is relatively simple. Your contractor sprays down the road with a mixture of water emulsifier and asphalt. Then, a thin layer of gravel is placed on top before being flattened with a roller.
Sealcoating also offers the additional benefit of disrupting your tenants’ lives as little as possible—it can easily be done in sections and only takes a day or two for each section. And, unlike major construction projects, your tenants won’t have to deal with constant road closures, drilling, or digging.
Finally, it extends the life of the roads underneath the sealcoating, and makes your community look better in a short amount of time, with minimal cost. As I always say, when the streets look good, the whole place shines.
Tip #2 – Apply Fresh Paint
A fresh coat of paint goes a long way. Paint is fairly inexpensive, gives a property an instant facelift, and is a task that you can get tenants to help you with. One such way is to incentivize them.
Look at the properties in your neighborhood and, if you find ones that could really use an update, offer to buy the paint for them. If you have the time, even offer to help paint. This is a win-win situation as your tenant gets a newly painted property, and you can request a higher asking price for your park.
Tip # 3 – Do Cosmetic Lawn Care
Flowers aren’t expensive, and they really brighten up a park. Gardening, even a small amount, can get buyers interested—it makes it look like somebody cares. Perennial plants can last for years, survive harsh winters, and keep blooming over and over again, with no more care than you give your grass.
Cedar and wood chips can also spruce up bare spots on the ground and give the entire property an overall manicured look, again with minimal expense. You don’t have to build a rainforest, but there’re tons of simple, inexpensive plants that you can buy at your local garden center to make your property look more welcoming and appealing to buyers.
Tip #4 – Avoid Major Capital Improvements
One big mistake I see potential sellers make is they expect buyers to pay for their expensive upgrades. They say, “Well, I paid $100k to rebuild the clubhouse, so their offer should be $100k higher.” But your buyers aren’t looking at the cost you’ve put into the property, they’re looking at how much those improvements can make for them.
When you add major upgrades, it should be so you can command a higher rent from tenants. You can add an Olympic size swimming pool if you want, but that won’t matter to a buyer if all your tenants are paying the same amount they did before your community had a pool. Upgrades are only as valuable as what your tenants are willing to pay for them.
Finally, if you have a lot of major, non-cosmetic problems, like electrical issues, sewer problems, or problems with the water supply, you may want to put off selling your property until you can afford to fix them. If you absolutely have to sell, then at least get some bids for the work your property needs so your potential buyers can see if it’s still a wise investment despite the needed fixes.
The point of the cosmetic upgrades I suggested was not to hide major problems but, instead, to put your property’s best foot forward, whether you have five hundred units or five. When someone drives into a run down park they’re considering buying, they get turned off. They think, “If everything looks like crap, what are the problems I can’t see?” You don’t want potential buyers thinking that when they visit your park.
I’ve been in the business of buying and operating mobile home parks for decades. I’ve seen people waste money on improvements that weren’t necessary. I’ve also seen people neglect to make simple improvements that would have benefitted them during a sale. Don’t be one of those people.
Give me a call or shoot me an e-mail, and I’ll be happy to go over your property specifics with you so that you, and your tenants, can get the most out of your mobile home park.