What’s the best way to manage your mobile home park investments?
3 Ways to Manage Mobile Home Parks
- DIY self-management
- Hire a private property manager
- Professional third party property management
Hiring a private independent individual to manage your properties can be a type of hybrid option which falls in the middle of the scale. However, the degree to which it leans toward DIY or professional management will rely a lot on that individual. Too often it ends up not being any more efficient than managing yourself; especially if you have to train, manage, supervise and step in for that individual. On the other end of the scale the cost of a superior manager may not offer enough savings compared to bringing in a professional and experienced property management company. It is an option. But for now let’s look at the biggest contrasts which lay between self-management and professional third party property management of mobile home parks.
The Pros & Cons of DIY Property Management
The pros of managing your own mobile home park include:
- Hands on control of management
- Accurate decision making on maintenance and improvements
- Speed of delivering customer service
- Non-financial rewards of being involved in your own project
The cons of managing your own park include:
- Lack of freedom to travel or take time off
- Location limitations when looking for park acquisitions
- Limited ability to manage more investments
- Low ROI on time and labor
- Personal safety risks
- Danger of emotional versus objective decision making
- Financial liabilities
The Advantages of Professional Third Party Property Management
There can be serious issues if the wrong property management company is hired. If their interests are not your best interests there can be conflicts with occupancy rates, tenant retention, and net cash flow. It is not always easy to select a great property management company, but when one is found there can be great benefits for mobile home park owners.
These perks and pros include…
Protection from Liability
This is absolutely one of the most significant and most underestimated benefits of deploying professional third party management. Not only is property management a dangerous profession from a physical standpoint, it is rife with legal and financial liability. Our legal system has made a dramatic 180 degree turn from “innocent until proven guilty,” to guilty unless you can prove you are innocent. That can be virtually impossible when it is a tenant and their family’s word against yours. The bottom line is that it is just better if the owner is not the one collecting rent, interfacing with tenants, and out on the property conducting maintenance and repairs. Let a third party company with their own insurance and legal team provide a buffer and bear any related costs.
Some new investors, and even relatively experienced ones incorrectly believe that DIY management or even piecing together their own team is always the least expensive option. Do the math for yourself. Take into account everything from the investment in recruiting help, to your time spent training and managing, to wages and perks, for all positions you would need to fill from marketing for and screening tenants (including hard costs), to accounting, and customer service and payment processing, etc. Then compare that against the cost of hiring a company. The numbers ought to be close, if not firmly in favor of a 3rd party company, without even counting a fair wage for your own time.
ROI on Your Time & Effort
How much would you get paid as the property manager versus how much you can generate as a business owner or investor in multiple properties?
As the pure owner of a mobile home park you are able to simply collect the financial rewards. Let someone else deal with the headaches, stress, and time, so you can get on with what you love most while getting paid for it.
DIY property management may be right for some for a limited period of time. Be sure to do the complete math for yourself before making assumptions or hiring anyone. Most importantly; be clear about what you want out of this investment. Do you want another job or a true investment which fuels your financial freedom?