6 minute read
Home Resale Operations Boost Long-Term Community Growth, Value
Even Modern, Sold Out Resort Locales Benefit from Home Resale Efforts
by James Cook
TThe manufactured housing industry has always been on the cutting edge of technology, from the speed in which homes are manufactured, to the equipment used to build the homes, to the aspect of building a complete home in an environment protected from outdoor elements.
As technology continues to improve, opportunities to develop a higher quality product continue to grow.
But there is something that has always been perplexing, and that is the number of owners who will disregard home resales, both in regard to resident needs and overall value of the community.
While we finally have more and more communities being built, community owners should remember the consumer and their own property values when homes come up for sale. »
Industry Development
The Resurgence of New Manufactured Home Communities
One of the most exciting trends in our industry today is the resurgence of ground-up development for manufactured housing. When an owner develops a new community, they are hyperfocused on new home sales because the success or profitability of the project is directly tied to the absorption rate. New home sales in new communities are driven by heavy advertising and fanfare, combined with display models and a robust sales staff. The biggest variable and question here is where one advertises. MHVillage combined with SEO and Google AdWords driving traffic to the main property website are the most obvious mediums. Then, there’s heavy social media activity and a large presence on Facebook. their home). Ultimately, the lack of a presence in the community resale market and subsequent disjointed pricing, marketing, and advertising processes result in lower overall home values.
Create the Needed Plan for Systematic Home Resales
The suggestion here is not that owners fully take over all resales, but there seems to be a simple middle solution. First, create an MHVillage account and list all “New” and “Used” sales. Next, list all resales on the park website alongside your new sales. Advertise and promote resales everywhere there are listings for new or inventory homes. Finally, have your office maintain a resales desk with a list of all available homes and their details, as well as the contact information for the representative
-James Cook
Additionally, there should be a combination of print, radio, and TV time, raising awareness of the development and the opportunity for local affordable housing.
The challenge comes when ownership is done filling their community. Many owners divorce themselves from the home resales, leaving residents to fend for themselves and sell peer-to-peer. This causes inefficiency in the resale market and gives far less pricing guidance to the consumer (the resident trying to sell that is handing the resale (individual, real estate agent, etc.).
The idea of promoting resales alongside new and used community owned homes may seem counter-intuitive, but it is the right long-term decision. Strong resales actually lead to more new sales and show potential home buyers that they will have liquidity and are less likely to take a loss on resale. In comparison, an aging community with poor home sales is a dying community. A community with a robust resale market allows the residents’ home values to hold their own and, in some cases, even rise. Ultimately, this will help shrink the delta between new and used homes, making the new-home premium seem more reasonable for prospective home buyers. By seeing the community owner’s involvement, these homebuyers also will have the sense that if they buy the new home and ever need assistance with resale, ownership is invested in having it be swift and fiscally beneficial.
If community owners track resales, they would recognize trends in the pricing data related to age and size of a home, location within the community, and many other factors. This information can help owners begin to strategically buy back the lowest quality homes for a remodel program. The process would breathe 20-plus years of life into the community. Once resales are strong enough, an owner can selectively pull out the oldest remodel homes to bring in new homes. A crucial notion to consider about the resale-remodel approach is that it will set a “floor” on resales, which improves the socioeconomic status of the resident base. People buying a home for five to 10 years’ worth of lot rent are invested in the community. A homebuyer looking for one or two years is basically a renter. The less invested resident is less likely to care for the community and is more likely to break rules and upset other residents.
Achieving the Goals of Community Ownership
There are two primary goals for every community owner: 1) improve your residents’ overall experience
and quality of living; and 2) make a dollar.
The path to achieving these goals starts with the common areas, infrastructure, and aesthetics. Fix the roads. Clean or replace the signage. Update the office and clubhouse. Then, build a new website, promote the property with fanfare, answer the phones, and create strong availability. Furthermore, establish new rules and, even more importantly, enforce them. These rules should cover residents’ yards, home exteriors, and overall cosmetics. Implement a 10-point inspection for resale that requires the home to be properly tied down and skirted, the exterior to be clean and roof intact. If for some reason the homeowner cannot pass the inspection, the community owner can provide a list of fixable items that allow the resident to gain compliance, or offer to buy the home.
Finally, community owners should utilize different amenities to improve the overall quality of life for their residents. There are many nonprofits looking for a venue and an audience to help. If there is a rec hall or pavilion, offer a place to host English classes, computer classes, and after-school programs. There are charities with clothing, food, and other services, (depending on the age and socioeconomic group,) that are very relevant and will add value for the residents. Look for activities that bring people together and increase their enjoyment, such as movie nights or sporting activities like soccer or table tennis.
Now, should a resident not like the improvements and inherent rent increases justified by demand and the market, an environment has been created for them to quickly liquidate their home. This gives them the opportunity to be part of a clean, safe, and affordable manufactured housing community. MHV
James Cook is the national director of brokerage for Yale Realty and Capital Advisors. He entered the manufactured housing and RV property asset class in 2005 as a licensed agent listing homes for a local investor. In 2012 he founded the fully integrated finance and brokerage shop and has accumulated transactions exceeding $1 billion in value. He offers perspective at a national level, providing insight into the niche industry.
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