One major factor when you own or manage a mobile home park is determining what you should charge for lot rent. There are a lot of factors that go into this decision, so you must consider them carefully.
The lot rent should be enough to cover that lot’s part of the park’s expenses and provide a bit of income. However, it shouldn’t be so high that it will price out people in the target market.
Upkeep and amenities are paid with lot rent
The upkeep of the grounds and the amenities offered are covered by the lot rent. This includes cutting the grass, caring for landscaping, maintaining parking lots and similar expenses. Some utilities, such as electricity, may also be covered.
Water bills are sometimes covered by lot rent because the entire park runs on one meter. In some cases, the lot rent may also cover internet service or garbage pick up.
Some mobile home parks have playgrounds, swimming pools and clubhouses. Any community features that are available for all residents are usually paid for out of the lot rent. Those parks may have slightly higher lot rents to cover those expenses.
It’s a good idea for park managers and owners to know what comparable parks are charging for lot rent. Comparing the amenities available can help them to determine if the amount they’re charging is sufficient.
Once the lot rent is determined, getting leases together for the lots is the next step. The lease should list out what amenities and communal expenses the lot rent covers. Having a representative to help with the legal side of the park is critical to ensure compliance with applicable regulations.