What is the median income in your area and how much $$ do your tenants make? How much is your rent?
Quote from: Estrogen Hostage on December 29, 2015, 09:43:07 amWhat is the median income in your area and how much $$ do your tenants make? How much is your rent? Good point here. If you really are lacking comparables, you can work backwards into the rent. I am going to assume that your residents are making the low range of area wages/income. Do some research and find out the low end average annual income. Statistics show that total housing expenses should not exceed 30% of the monthly income. That will help you see how your rent compares. Mind you, if they are paying lot rent and a loan on the trailer you will have to factor in the average loan payment as part of the 30%.
Quote from: victoryrealestate on January 03, 2016, 04:29:33 pmQuote from: Estrogen Hostage on December 29, 2015, 09:43:07 amWhat is the median income in your area and how much $$ do your tenants make? How much is your rent? Good point here. If you really are lacking comparables, you can work backwards into the rent. I am going to assume that your residents are making the low range of area wages/income. Do some research and find out the low end average annual income. Statistics show that total housing expenses should not exceed 30% of the monthly income. That will help you see how your rent compares. Mind you, if they are paying lot rent and a loan on the trailer you will have to factor in the average loan payment as part of the 30%. How do I find out the average income for a particular town?
Way too little information to answer. You say small town. Does the town have jobs? Do they pay well?What is the median income in your area and how much $$ do your tenants make? How much is your rent? Do you provide utilities? How many lots? What are property taxes? WHAT IS YOUR VACANCY RATE?Myself, I would start raising rents a little at a time. Maybe $20/month and see what happens to the vacancy rate. You might consider going up $20/month once a year until the vacancy rate approaches 80-90% (assuming you are higher than that now). At the same time, work to improve the appearance of the property and show tenants that they are getting some value from the additional rent. In the long run, you should get rid of most of the bad tenants and make your park more desirable with a higher net income.
Quote from: Estrogen Hostage on December 29, 2015, 09:43:07 amWay too little information to answer. You say small town. Does the town have jobs? Do they pay well?What is the median income in your area and how much $$ do your tenants make? How much is your rent? Do you provide utilities? How many lots? What are property taxes? WHAT IS YOUR VACANCY RATE?Myself, I would start raising rents a little at a time. Maybe $20/month and see what happens to the vacancy rate. You might consider going up $20/month once a year until the vacancy rate approaches 80-90% (assuming you are higher than that now). At the same time, work to improve the appearance of the property and show tenants that they are getting some value from the additional rent. In the long run, you should get rid of most of the bad tenants and make your park more desirable with a higher net income. That's good advice.One of the ways that "Moses" taught me, was to call on '4Rent' signs in my area. If there's not a lot of signs, this tells you something about the market.If there's a LOT of signs, this tells you something else.Never mind, finding out what the asking rents are when you call, and getting a good idea of the market. Better yet, make appointments to check out the vacant units, and see what the competition is doing first hand. This doesn't have to be done more than once if we're investing in a new area. After that, we get first hand feedback from move-outs, and response rates from our advertising.I made the mistake of letting one landlord in Long Beach, CA know what I was doing, by showing up and asking about her rents, and I nearly had a gun drawn on me. Not really. But man she ushered me out so fast, I thought somebody farted.Back at the ranch, our rental ads should be giving us good feedback on the market, assuming we're quoting rents.For example, way back in 2000, the rents on one of my 3/2/2's in Garden Grove, CA had become too low. I had rented it for over-retail four years earlier at $900/mo., but the rental market had skyrocketed since then ($150+ annually).Before the house was vacant, I advertised what I thought was 'retail', or $1,200/mo. My phone rang off the hook. So, I increased the asking rent by $150, and my traffic nose dived. However, I still got the house leased up quickly, not realizing that I was still offering a perceived bargain. Retail rents had risen above $1,500 at that point. I was fine with a perceived bargain ...just not an actual 'steal.' Meantime, it's also probably smart to ask prospects what they're seeing in the market. They'll tell you. I've had more than one prospect tell me that I was asking too much in rents. FWIW
Yup. Exactly.