Mobile Home Park Mastery: Episode 233

The Evolving Role of Community Managers

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In the old days, the typical mobile home park manager was tasked with a wide range of roles – and with these came considerable risk to the property owner. In this Mobile Home Park Mastery podcast we’re going to review the ever-changing role of the community manager and how it’s a win/win/win for the residents, the employee and the owner.

Episode 233: The Evolving Role of Community Managers Transcript

Just as the Mobile Home Park industry continues to change and mature, so does that of the community manager, this is Frank Rolfe, the Mobile Home Park Mastery podcast series. We're gonna talk about the evolving role of the Mobile Home Park manager. Now, way back in the early origins, back in the 1950s through the 1970s, Mobile Home Park managers did everything. If you talk to Moms and Pops, or if you do due diligence on a park that's still with the original Mom and Pop, you'll often find that they entrusted the manager into every possible management function, that manager signed up all the original leases. They collected all of the rent, they dispatched all repair issues, dealt with the city on any problems, supervised homes coming in, supervised home hook-ups and skirting, showed homes, rented homes, sold homes, interacted in all tenant disputes, and then after collecting all of the revenue for the mobile home park, they would then pay all the bills and then send the owner a check for the difference, and that was the classic system, and I've done diligence on many, many parks side by side with the owner going over things and how they work and independently of the owner who might live out of state, and that was just the way parks always were done.

But then you had a problem with that system. And we all know what it is. It's a terrible one, when you have the manager collecting the rent and paying the bills and sending the owner a check for what's left, you just invite problems, embezzlement is obviously rampant in that system, but so is just bad management practices, who's overseeing who they dispatch for the contractor? Who's watching utility bills? Who actually cares what they show? Who's even minding the store and profitability, the manager doesn't get any of it, at least they're not supposed to.

So what you had is you had a system where all the cards were stacked against maximizing that income. However, for some reason, Moms and Pops were just fine with that, they just didn't mind the fact that they were entrusting their destiny to a third party, but then what happened was you had professionalism come to the mobile home park industry, and I would pick that probably starting back in about the '90s, not that period, because that's when Dave and I got into it, but also Sam Zell got into it and many others. And people started looking at these old mobile home parks and they started bringing them back to life and they started to question everything Mom and Pop had been doing. And they thought, you know what, this is a terrible management structure, we've gotta change this. So then the new role came basically that the manager would do many of the same functions, they would collect the rent, they'd even deposit the rent, they'd show and they'd sell homes, they'd rent lots, they'd solve any residential issues and all of that kind of thing, but they no longer were allowed to pay bills and no longer allowed to subtract the bills from the revenue and to cut the owner of check because they no longer had power over the check book. So professional owners, they moved the money out of the mobile home park on the mobile home park's bank account.

And into somewhere where it was more secured, they brought in software to go ahead and make sure that what was going on was correct, and there was a good paper trail to it. So that era, which began in the '90s and really took shape in the 2000s, that was a huge change in the evolution of the mobile home park manager, and it was all for the good. I don't know anyone who looks at that system and says, "Gosh, I really missed the good old days." Anymore than I know anyone who honestly would say, yeah, I'd really live back in the roaring '20s, despite the fact that they had almost no medical care.

So anyone who tries to glamorize the 1950s through the '70s and say, "Well, that was the glory days of the industry." Well, demographically, it's true. Elvis lived in a trailer park in two movies, and Lucy and Ricky in one, but from a management perspective, it wasn't any good. That wasn't any good. So that big shift that occurred in the '90s and 2000, that was smart, it was correct for the industry, that's what started to sow the seeds of people from other real estate sectors like apartments, lodging, retail and office to say, "Yeah, I think I could get in the mobile home park business, it's not that Mickey Mouse, it's not that goofy anymore," because it really had been really goofy up until that time, but now we're about to see another evolution in the mobile home park manager. It's happening right now, and this is a technology revolution shift.

Now, after that second shift, the biggest job the manager had remained collecting in rent, that's how they spent most of their time, that's what most owners focus was, that's what they normally were pounding on the manager, how are we doing on collections because the rent still came in through checks and money orders, and even sometimes cash, although you shouldn't allow it unless your state mandates it. And it was all entrusted to the manager and so the owner was still very relied on the manager collecting that money and getting that deposited. However, now the industry has a new huge shift, and that is online rent payment. Now, to give you an example, only about three or so years ago, our portfolio had roughly 0% online payments, today we are probably around 90% to 92% of all of our payments coming in online.

Now, how is that possible? You might say, "How did you go that fast? That far." Well, it was a big priority for us, we had the managers really go out and educate customers and try and have them change to the benefits of online payment, and if you could get that level of buy-in in our communities, there's no reason any community listening to this couldn't probably achieve about the same result. But now what happens if the industry has, as the new norm, online rent payment? Well, it has a huge impact on managers because now if you take collections out, now the manager still would have a little bit of collections work on communities that don't get the money in on time, so then they might have to go knock on the door, put out a notice, although in many communities today, even despite COVID, collections are nearly perfect, but when you take what had been the biggest piece of their job out of the job description where they're no longer the repository of checks and money orders and making those deposits and all of that, things change dramatically.

Now, think of all the time that your manager will have on their hands to go out and do other things. So what will the new role be once the industry changes to mostly online rent collection? Well, again, good things. Now the manager can spend more time interacting with customers, solving disputes with customers, selling and renting homes, rules enforcement, creating paper trails with residents on any resident issues, basically better management practices. And in many cases, those managers are going to see up to 50% of their whole time that was spent of their entire management time cycle each month, suddenly come back to them as far as free time, and now they can really get down to business and really maximizing the customer experience and running the office in a much more professional management style.

Now, who will benefit from this? Is it just the owners? Well, sure, the owners will definitely benefit by online rent collections, no doubt about it. Having no longer any exposure to the actions of the manager on collecting rent is a huge bonus. However, other folks will benefit this are the manager, obviously, I don't think any manager ever enjoyed the physical act of collecting money, but the other are the residents because now that the manager is going to spend the bulk of their time making sure customers are happy, they will probably end up far, far happier.

How will it change as far as the job itself? Well, the manager of the future will be much more about people skills not so much about accounting skills, that's a good thing, because we need orient managers to what our customers want. And what our customers typically want is somebody there in that office, if you have an office that's staffed, who is there to help them to get what they want addressed. So many times, if you get complaints on a manager that the complaints don't come back to their job and how well they're doing it, it comes back to how they treat customers. You get complaints that people just aren't friendly enough, now you'll be able to hire people who fit that role, people who really are people people.

Now, maybe even the titles will change because as the managers can divert more time to making sure the customer is happy, maybe the name manager isn't even appropriate anymore, maybe instead it's goodwill ambassadors, customer satisfaction experts. I leave it up to the industry of what the title should be, maybe in this final evolution, we need to rename it, but the bottom line, you would all regardless of the name, it's still gonna be positive for absolutely everyone, and I'm not really sure after we go through this next evolution of online payment, if it can really ever get any better. I think instead with the narrow focus of duties and the fact that we are then all aligned residents, manager and owners for customer satisfaction, the industry can really go up a notch and create a greater value which means we'll have greater retention, greater satisfaction, everything will finally get more in line with what we had all dreamed of, and that was a more professional industry.

This is Frank Rolfe, the Mobile Home Park Mastery Podcast. Hope you enjoyed this. Talk to you again soon.