Mobile Home Park Mastery: Episode 225

Successfully Using RVs To Fill Vacant Mobile Home Lots


Subscribe To Mobile Home Park Mastery On iTunes
Subscribe To Mobile Home Park Mastery On Google Play
Subscribe To Mobile Home Park Mastery On Stitcher


At the same time that mobile home prices from the manufacturers have risen to the highest levels in American history, RV ownership in the U.S. has also hit record levels and many of these owners are not using them for travel but for permanent residency. In this episode of Mobile Home Park Mastery, we’re going to discuss the potential to fill vacant mobile home park lots with RVs, and why that’s going to be one of the big factors in filling up the remaining vacant lots in communities from coast to coast.

Episode 225: Successfully Using RVs To Fill Vacant Mobile Home Lots Transcript

At what point do RVs and vacant mobile home lots intersect? That time may be now. This is Frank Rolfe, the Mobile Home Park Mastery Podcast, we're going to talk about successfully using RVs to fill vacant mobile home lots.

And why is that a big issue right now? Well, the first issue is that mobile home prices have never been higher in modern history. Thanks to COVID - or supposedly thanks to COVID - it'll increase in costs a lot of things like plywood, plus the fact that supposedly COVID related, you've got higher costs of home delivery, higher cost of set homes. In some markets to put a mobile home on a vacant mobile home lot may cost the park owner, even up to $70-$80,000. And at the same time that mobile home prices have been going up a lot, RV prices seem to be coming just ever more reasonable or at least more reasonable for the quality of the product that you get. I'm not talking motor homes here. We all know motor homes can be in the hundreds of thousands of dollars. But your good old fifth wheels and travel trailers. Many of those, if you go to your local RV store and look around at their offerings, you'll say wow, that looks like a lot better value than last time I was here five or 10 years ago. And the answer is it is. They're getting much, much better at building those and their costs have not gotten up at the same rates of speed as the mobile home pricing has.

The other problem you have is that RV sales are skyrocketing, never been higher. Yet mobile home sales to customers have pretty much never been lower. So just as strong as Americans are embracing RVs with their checkbook and obtaining their own loans, mobile homebuyers still fail to be able to get anyone to lend the money unless the mobile home park owner is involved, backstopping that loan through programs such as the cash program and others.

Also, you have the simple fact that the mobile home park industry and the mobile home industry in general, have never really been very good about public relations. They've never been able to really battle, they often haven't even attempted to battle, the stereotypes against mobile home living. But meanwhile, the RV industry has very successfully staged one of the great industry PR campaigns of all time in Go RVing. And through Go RVing, what you're seeing is people in all generations, not just baby boomers, but millennials too all believing that RVs are cool and upscale, and a great place to live. So for all of mobile home shortcomings, you have RV doing an equally better job than it used to. And the bottom line is you've got a lot of people who are now thinking about retiring into an RV, people who would never consider living in their retirement days in a mobile home to do so in an RV. Well, no big problem at all.

And then you have the latest issue, which is the hard infrastructure bill. I've written articles and talked about it extensively. I'm shocked at what a great thing it is for our industry. Why do I say that? Well look at the jobs that are going to be created from that and look at the locations that they'll be and think about how you're going to house all these workers who are there on temporary assignments, but yet might be many, many years in the making. Let's say you're going to go out and rebuild the entire water system for a place like Houston. Well, you're probably going to be on there for who knows how long, four to five year project. Those are the kinds of situations where people don't go in and buy a custom built brick home to live somewhere for five years. But they will go ahead and put an RV in a mobile home park and use as their home base for as long as that project runs.

 

Also the tools that will be used the hard infrastructure build, those are also going to attract people to live temporarily or live in situations where they would typically be in a place like a mobile home park, but again they prefer RV and its stigma and all those various reasons that RV people like RVs, and I don't blame them. So if we're going to assume that RV is may be the low cost alternative to filling vacant mobile home lots, which they truly are. When somebody brings an RV into a mobile home park it cost the mobile home park owner nothing. On top of that RVs don't traditionally use any greater utilities the mobile homes certainly do. So there's no utility upgrades needed. Also, there's no site preparation. I don't know of any HUD law regarding pads or piers or anything to go under an RV. So the bottom line of it is RVs are about zero cost to fill a mobile home lot, whereas bringing in a new mobile home, could be a very, very high figure.

So then the question is, how do we get more RVs to go into mobile home parks? Well, it's an interesting question, there's a lot of things to consider. Number one, people are not going to bring an RV, considering it is more of an upscale product with upscale clientele, they're not going to bring one into a mobile home park that is not at least attempting to put its best foot forward. You need to have a good sign up front, you need to have good pride of ownership, need to have a true sense of community. So before you even think about trying to attract RV people, you'll need to make sure that you are producing a product that they would want to live in. And yes, they are a little more finicky in what they do. So whereas a lot of people may be a little aesthetically challenged in the world of mobile, home parks, those RV customers, they're not. So you've got to make sure your common areas are good, roads free of potholes, all the basic necessities that make people want to live in mobile home park to begin with. You've got to accelerate, you have to more aggressively tackle those if you're going to want to get RVs in the door.

Now, what do you do? If you really want to bring RVs in? What are the action steps you would do? Well, first off, make sure that your permit and your city wherever that mobile home park is that they allow you to put RVs on lots, because if you're really read your permit, and the paperwork it may turn out you can't. I have seen situations where RVs were not allowed in parks. I've also seen situations where RVs are allowed but only as a certain percentage of the overall occupancy of the mobile home park. So first, before you even think about it, make sure that you can do it. I think that's absolutely essential.

Next, make sure you have all the right utilities on your lot, make sure your water and sewer and power are working, because RVs do require those things. So you got to have the right to bring in an RV on a mobile home lot. You also have to make sure you have the utilities working and ready for it. But once you have those two things in position, then it's all just about attracting an RV. So how do you do that? How do you get an RV to want to go there? Well, the first thing you want to do is you you've got to let them know that you want their business. You need to appear on Google, on any Google search of RV lots in whatever that location is. When you type in "RV park in" blank, you have to pop up on that list. If you don't pop up on that list, no one's ever going to seek you out or talk to you. So you have to make sure that you have visibility online.

Number two, you have to have a really, really good website. Because again, these people are more discriminating. A lot of mobile home parks have no website. And if they did Good heavens, who knows how bad it would look, you'd probably have Mom and Pop taking pictures of the septic tank or something as the lead photo. That doesn't work, you've got to have a really, really good website. You also need to have very, very positive social media reviews. It's very important because again, this is a more sophisticated customer and they read those social media reviews. Now a lot of people what they do is they never even work that angle. And all they've got are a couple of really terrible ones with zero stars or one star, these are residents you probably evicted at some point. Instead, you need to approach your happy residents and ask them if they would give you some kind of social media review. You know, it's going to be good, they're happy customers. And then possibly, if you have enough of those, it will outweigh any negatives that you might have. But you've got to have a good social media presence.

And then finally, some kind of sign in front that says RVs are welcome. Even though they may have found you online, it helps reaffirm that you want their business. Now what about when they come in the door? Well, we treat those folks in the RV is the same as someone with a mobile home. So we're going to go ahead and have a regular lease and regular rules, we're going to go ahead and do a quick criminal credit screening, we're going to have them sign the documentation, because we want to treat them just the same as anyone else renting our lead. We're hoping they'll stay there for a lifetime. It's not we're not going to do an overnighter thing, we're not going to do by the week, we're going to do it by the month just like a regular mobile home park resident. And in so doing, we're hoping that since they've got a long term commitment with utilities in their name, that they will in fact do pride of ownership touches such as often we have RVs who build a carport for their car, or maybe they'll put in a outdoor fire pit, furniture around that, whatever the case may be. It's all those little things that give them that pride of ownership that lenders like to see.

And speaking of lenders, will they agree with this plan? Can you bring in an RV on a mobile home lot and have them count that as though it's an occupied mobile home lot? The answer that we have found is yes, they will do that in moderation. Now, if you had a 50, space mobile home park and you had 44 RVs in it, no, they would probably be afraid of that. They'd say, "Well, this isn't a mobile home park at all. This is an RV park and RV parks traditionally trade at Cap rates are up to two points higher than mobile home parks. So that's not going to work for you." But if you have a moderate amount, what's a moderate amount, I don't know, maybe five or 10%. They're probably not going to bristle at that too much, because really, they look about the same. Remember that RVs and mobile homes all were joined at the hip for the longest time. So basically, everyone is used to seeing RVs in mobile home parks. And as long as they've got pride of ownership, you typically won't get much pushback.

So the bottom line to it all is as mobile home prices keep spiraling upwards, all park owners need to reflect for a moment on less expensive ways to fill vacant lots. And there's no question that RVs are one of those options, in fact, a very, very good option in the right location. This is Frank Rolfe, the Mobile Home Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.