Similar manufactured home communities (“MHCs”) can have different rent levels and valuations, primarily due to variations in deferred maintenance, a sense of community, and overall curb appeal. At GGC, we understand the critical factors that drive these differences. Through targeted physical improvements and strategic operational strategies, we aim to create thriving, attractive communities that benefit both residents and investors.

Our Value Add Approach

Physical Maintenance

Enhancing the curb appeal of an MHC has significant investment benefits. First, it enhances the visual attractiveness of the community, making it more appealing to both current and potential tenants and contributing to a sense of pride among residents. Physical improvements also increase the property value, resulting in higher rental rates and improved Net Operating Income (NOI). Additionally, when prospective MHC buyers see a well-maintained community, they are more likely to view it as a desirable investment opportunity. Specific projects to achieve these improvements include:

Removing Clutter and Enhance Home Appearance: Remove discarded items sprinkled throughout the community. Pressure-wash houses, walls, and sidewalks.

Changing the Name: Names can influence perceived values and shape community culture especially if the existing name includes ‘Mobile Home Park.’ This change can create a more inviting atmosphere, potentially attracting a more invested resident population.

New Signage: Install new signs or upgrade existing ones.

Enhance the Landscaping: Trim trees, plant flowers, and add bushes to create a welcoming and visually appealing community.

Repair or Replace Skirting: Fix skirting and carry out exterior maintenance to refresh the appearance of homes.

Paving the Roads: Improving road infrastructure can significantly enhance the aesthetics of a property and offer an immediate justification for rent increases.

Operational Strategies

Implementing an operational value-added strategy in a MHC is crucial for increasing NOI and creating a thriving community. Operational value-add strategies promote resident satisfaction and long-term residency, reducing turnover rates and enhancing the park's reputation. A few operational value add strategies include:

Enforcing and Upgrading Community Rules and Regulations: During site visits, we often observe communities where the established rules intended to maintain cleanliness, safety, and upkeep are disregarded or inadequately enforced. We are committed to enforcing and revising these rules and regulations to foster a cleaner, safer, and more organized community.

Adding Pre-Owned or New Manufactured Homes: Vacancies in manufactured home communities aren't always reflective of market trends. Frequently, independent owners lack the capital or connections with home manufacturers to acquire and place homes in their communities. Adding homes and boosting occupancy levels is the most straightforward method to enhance the value of a community.

Implement a Lease-to-Own Program for Park-Owned Homes: By offering park-owned homes to tenants through a lease-to-buy arrangement, we shift the burden of home upkeep and maintenance to tenants. This fosters a sense of ownership, lowers turnover rates, and enables the community to get more attractive financing.

Develop a Community Amenity: Constructing a community amenity, such as a picnic or playground area, can create a sense of community and provide a gathering space for neighbors. Furthermore, it provides justification for rent increases.

Implement Individual Utility Metering: Utility expenses can significantly affect a community's Net Operating Income. Installing individual meters to measure water and sewer usage for each home allows us to directly allocate utility costs to tenants which increases Net Operating Income.

Enhance Tenant Screening: We conduct comprehensive background checks on potential tenants, enforce minimum credit standards, and prohibit individuals with felony backgrounds from residing in the community. This ensures a stronger collection of prospective residents who are likely to prioritize the upkeep of their homes and contribute positively to the community.

Conclusion

There are various ways to optimize profit and increase the value of a MHC. By implementing both physical and operational improvements, we can significantly boost Net Operating Income and property value. More importantly, these steps lead to a safer and more pleasant living environment, fostering a greater sense of community and pride among residents. When residents take pride in their community, it enhances the overall appeal and stability of the property. Our value-add strategy builds a foundation for long-term success, benefiting both our investors and the residents who call these communities home.‍

Greenside Gazette

Introducing Our New Acquisitions Analyst

We're excited to introduce our new Acquisitions Analyst, Shreya Lama. She focuses on sourcing deals, underwriting MHCs and RV resorts, and managing our broker/deal flow database. After an intensive six-week training, she has underwritten over a dozen properties within her first few weeks, with two leading to LOIs. Shreya's analytical skills and strategic mindset make her a valuable addition to our team, and we are confident she will enhance our growth.

Birdie Basics

Return on Investment (ROI): is a financial metric used to evaluate the profitability or efficiency of an investment. It is calculated by dividing the net profit generated by the investment by the initial cost of the investment, and then multiplying the result by 100 to express it as a percentage.

Skirting: Skirting on a manufactured home refers to the material or panels that cover the space between the ground and the bottom of the home.

‍

‍

‍