How Did the Pandemic Impact Mobile Home Park Owners
Across the country, landlords had to make some difficult decisions when it came to their units, especially mobile home parks. Some mobile home parks were particularly hit hard with lost revenues early on in the pandemic, but were able to get by by cutting expenses. In 2020, the typical mobile home park owner had about 3.3 less in lot revenue and ended up with 6.6 fewer expenses in comparison to 2019. Numbers were similar in 2021. Even though revenue went down, by cutting expenses, landlords were able to increase the profit on their trailer parks. However, many mobile home park owners, by cutting expenses, might have potentially neglected maintenance aspects of their property.
Why did mobile home parks lose revenue?
Mobile home park owners lost revenue during the pandemic for a wide variety of reasons. First and foremost, many areas of the country saw eviction moratoriums. Therefore, landlords employed a wide variety of different techniques to help tenants, including:
- Forgiveness of back rent.
- Rental extensions.
- Rent reduction.
- Offer payment plans for their tenants.
The result was mixed for mobile home park owners. Some of them were able to improve balances by decreasing expenditures. Some mobile home park owners ended up missing mortgage payments on their properties.
How were some mobile home park owners able to maintain profitability?
Many mobile home owners deferred property maintenance during the 2020 and 2021 calendar years. Over 30% of landlords in the country deferred property maintenance in 2020 and a similar number followed suit in 2021. In prior years, only about 5% of mobile home park owners deferred maintenance. Also, some mobile home park owners got out of the business entirely. In 2020, there were significantly more mobile home parks up for sale than in 2019.
What impact does deferring maintenance have on a property?
When mobile home park owners are forced to defer maintenance, that can have a detrimental impact on both cash flow and the resale value of the property. Deferred maintenance may mean a few more lots that are vacant each month and upgrades that could improve the profitability of the mobile home park.
Deferring maintenance also decreases the net value of the property over time. For example, landscaping, submetering, and other capital improvements will not only improve the resale potential of the property but also improve its profitability in the future.
How can a cash offer help?
The pandemic made mobile home park ownership unprofitable for some owners. Some may have found themselves in a financial bind if they fell behind on property tax or loan payments. A fast cash offer can put your trailer park in someone else’s hands and let you walk away from a park that is no longer profitable.