MHC Investing 101: The Negative Impact of Vacant Lots and Empty Houses
By John Ace Underwood and Tammy Fonk, Co-Founders of FillrateMHC.com
Manufactured housing communities provide affordable housing options for many people. However, vacancies within these communities can have both an economic and social impact. Understanding these impacts is crucial for residents, park owners, and policymakers. This article explores the various ways vacancies affect manufactured housing communities and offers insights into potential solutions.
Economic Impact
Reduced Revenue for Park Owners: Vacancies directly affect the revenue stream of park owners. Each unoccupied lot represents lost rental income, which can be substantial if the vacancy rate is high. This loss of revenue can lead to deferred maintenance and reduced investment in community amenities, further exacerbating the problem as the park becomes less attractive to potential residents.
Increased Costs: Maintaining vacant lots still incurs costs for park owners. These include property taxes, utilities, and basic upkeep to ensure the lot remains in a condition suitable for future residents. Additionally, marketing and administrative efforts to fill these vacancies also add to the expenses.
Lower Perceived Values: High vacancy rates can lead potential buyers and residents to conclude that due to high vacancies, both in spaces and/or in the number of empty models, others have chosen to buy elsewhere, for whatever reason. This puts additional pressure on the sales team to assuage such concerns and overcome objections.
Social Impact
Community Cohesion: A high vacancy rate can disrupt the sense of community within a manufactured housing park. With fewer residents, social ties can weaken, leading to a less connected and supportive environment. This erosion of community spirit can impact the quality of life for those remaining.
Safety Concerns: Vacant lots and homes can sometimes attract vandalism, squatting, and other criminal activities. This can create an unsafe environment for existing residents and further deter potential new residents from moving in.
Reduced Rule Compliance with Rules: Empty lots and vacant houses lead some current residents to assume community rules will not be enforced simply because the owners/operators canāt afford to lose another resident. Rule compliance is enhanced by having fewer vacant lots and empty homes.
Reduced Services and Amenities: As revenue declines, park owners may cut back on services and amenities. This reduction can include everything from landscaping and maintenance to recreational facilities and community events. Such cutbacks diminish the appeal of the community and the quality of life for residents.
Mitigating the Impact of Vacancies
Addressing the issue of vacancies in manufactured housing communities requires a multifaceted approach:
Streamlining your Sales Process: Prospective buyers often find the process of buying a home in a community way more challenging than need be. Implementing an effective and efficient process for both selling and financing homes can go a long way toward selling more homes and reducing the negative impact of vacancies.
Effective Lead Response and Management: It is tragic the number of deals that are lost simply due to apathy. Too many communities respond to leads generated by their marketing effort āwhen we have timeā. When this is combined with the lack of or the underutilization of a CRM system, the losses are staggering. The impact of implementing a clear and strategic process for responding to leads and selling homes will astound even the greatest skeptic.
Incentives for Occupancy: Park owners can offer incentives such as reduced rent for the first few months, move-in bonuses, or referral rewards to attract new residents. These incentives can help fill vacancies more quickly and stabilize the community’s revenue stream.
Community Improvement Initiatives: Investing in the overall improvement of the community can make it more attractive to potential residents. Enhancements might include upgrading common areas, improving infrastructure, and offering more amenities. A well-maintained and attractive community is more likely to retain current residents and attract new ones.
Flexible Policies: Implementing flexible policies regarding lease agreements and home purchases can also help. For example, offering rent-to-own options or flexible lease terms can make it easier for people to commit to moving into the community.
Marketing and Outreach: Effective marketing strategies targeted at the right demographics can help fill vacancies. This might involve advertising in local media, partnering with relocation services, and leveraging online platforms to reach a broader audience.
Conclusion
Vacancies in manufactured housing communities pose significant economic and social challenges. However, with proactive management, community investment, and supportive policies, these challenges can be mitigated. By focusing on creating attractive, safe, and cohesive communities, park owners and policymakers can ensure that manufactured housing remains a viable and appealing option for affordable living.
For more information on selling systems for manufactured housing communities, visit www.fillratemhc.com.