All good mobile home park owners have the same core of beliefs on what their role and duties are. But there’s a whole additional list that is not what they’re all about. In this episode of the Mobile Home Park Mastery podcast series, we’re going to review the division between the sacred pledge of the smart park owner vs. items that should never be assumed to be in that list of duties.
Episode 134: The Park Owner’s Pledge (And What It Doesn’t Include) Transcript
All good mobile home park owners have the same core of beliefs. I called this the trailer park owners pledge. However, there's some items that are not in that pledge, and I thought it would be interesting to go over what we are supposed to do and separate that from those things which we are not required to do.
This is Frank Rolfe, the Mobile Home Park Mastery podcast series, and we're talking all about basically those items that most mobile home park owners should be doing, but also to acknowledge the things which they should not be doing. So let's start with the pledge. Well, number one, a nice looking entry. I think we would all agree with that. It's your first shot. First impression. You want to have a really nice looking entry. That means a nice sign, nice fencing, nice landscaping, just a given. Let's put that in the pledge category.
Next, you want to have a road system free of potholes. It may not always be perfect. It may need to be seal coated, so from a parent's standpoint, often it needs some work. Depends on what time of the year, but definitely if you're in the winter when we're plowing the roads and it's impossible to paint and stripe, and the roads will not look as good as they will perhaps in summer, but we always like to keep the roads, at all months of the year, free of potholes. They jar you, they jar the car, so we always try and keep those out of there.
We also always want to maintain working utilities. Water, sewer, trash, power, gas, even the ones that we're not directly involved in. Typically electrical and gas. Nevertheless, we want to make sure that they're on and working, and if we need to call the city to find out why they're not, we certainly will. We also want to have superior common areas. Those are the things we own. There's no excuse for those not being nice. Those can include nothing more than a grassy area, or a clubhouse, or a pool, or a playground, whatever the case may be, all of those common areas need to look their best.
Also, we need to offer fair collections to the residents and fair rules enforcement. Basically, we need to do those things that can ensure their quality of life and their property value. And we do it to a far higher level than the city government ever does. If you look at the rules in a mobile home park and the rules and the surrounding neighborhood, you'll see the mobile home park rules are much stricter.
Things that cities allow, we don't. We don't allow dangerous breeds of dogs. Cities do. We don't allow grass over certain height. Even the city said they don't, they do. They don't get out there and mow it and do anything about it. Cities in fact are fairly lenient on many items that ruin the neighbors' quality of life, whether it be non running cars, junk in yards. Looking to the city to help enforce those items to keep your property value up typically is not a good working concept.
Also, we provide professional management. We want a manager who is fair, consistent. They're on time, always there for the residents needs. So those are our pledges. Those are the things that we are, and any smart owner needs to be doing on a daily basis. But what about the things we're not really supposed to do? What would those items be?
Well, first off, mobile home park owners are not required to be a bank. Banking is not what we do. So if the rent is due on the first and someone can't pay the rent, and they go to you and say, "Here's the deal, I can't pay the rent, but I'll try and pay a portion of this month's rent next month, and then another portion the next month." That's not our line of business.
Now there are banks out there. There are credit unions out there. Customers need to go to those, borrow from those, borrow from friends and family, use their own credit card, but don't try and make the park owner a bank, because that's not part of their pledge. That's not the business model. That's not what park owners do.
Another item is being a concierge. The manager of the mobile home park is there to collect rent, to enforce rules, to make sure that utilities are running smoothly, and the road is free of harm, and that the common areas are looking good. That's what a manager does. The manager is not there to do additional items just to be nice. Now they can try and be nice when they can, but often, residents will try and push that to extremes. They will call up and they'll try and have the manager get involved in things they should never be involved in. Such things as opening the door for a repairman into their home. That's not what we do. Calling up the manager constantly complaining of loud noises, or perhaps ambient light is keeping them awake at night. Again, that's not what the park manager does. It's not a cruise ship. It's not a hotel. There is no concierge service, so don't as a park owner feel the need to get involved in those situations, because that is not part of your pledge as an owner.
We're also not a complaint department. There are some residents who delight and call you the manager daily and complaining about things. Often, which aren't even factually true, just because they like to either be the boss or punish the manager. Perhaps they have some kind of vendetta against them. Maybe they're just very sour, unhappy people. The manager does not have to put up with that.
You need to back up the manager when those residents arise and start calling up, particularly if they start cussing at the manager. Your manager does not have to put up with that, and those few cases where that has happened in the past, we told the resident, "Look, you're not happy living here. As a result, feel free to go anywhere you want, but you cannot continue to call up and harass the manager."
And typically when you play those cards and let them know that you're fully open and ready for the idea of them leaving, they back down because they think that the veiled threat they might move is the only ammo they have over you or the managers. So the minute you let them know that you don't care, they're free to go. You can always replace them with another resident. Even though it's going to cost you money and time to do it, you're more than happy to do that rather than lose your manager to being bullied. And that's simply, again, not part of your pledge.
Also, you're not supposed to be a payday lender, and I'm talking not the situation where they can't pay the rent. I want to make you into a bank. I'm talking about when they want to actually borrow money from you. So it's even worse. This is the tenant who can't even pay the rent, and now calls the owner or the manager wanting to borrow several hundred dollars or $repairman for car repair, go on a trip, whatever the case may be. It's bad enough that someone doesn't pay you rent, but it's insanity if you start loaning money out of your pocket to residents.
That is certainly not a part of your pledge, not a part of your business model, but there are people who do that. Payday lenders do that. Credit card advances do that. Friends and family, they can do that, but that's not what being a park owner is all about. You are not a financial services company. You don't even know legally how to even do that. Even if you are crazy enough to want to do that as a satellite business, there's a whole set of laws and decorum on lending money and you know nothing of that, so more than likely your adventure in the lending would lead to complete unhappiness, because you'd be found that you weren't even doing it properly.
Finally, being a nonprofit is not part of our pledge. It's a very sore topic for most people in the media to accept, but mobile home parks are not nonprofits. I don't know why people think that we are nonprofits except for some bizarre reason. They have this idea that anyone who deals with people who have lower incomes must be related to the government. It's not true. In the apartment industry, yes it is. Most of the folks who deal in section eight apartments have some tie to the US government, because that's where the rent comes from, through section eight.
But we're not those people. We don't have any nonprofit status. We are for-profit businesses. So what does that mean? Does that give you a license to gouge people and provide a bad quality for your for-profit business? No. It doesn't allow for that, but what it does allow for is the fact that you are a business. You're trying to bring in money and to maximize the revenue you bring in. You're also trying to be as efficient as you can with the expenses. It's more or less of a mindset.
We've had people when we've sent out notices of raising the rent, who call us up and say, "Hey, why did you raise the rent? Why don't you go ahead and leave it alone or drop it?" Even though the market rent might be 2 or $300 a month more, they can't seem to accept the fact that the very basics of capitalism is business, and they can't separate for-profit from nonprofit.
I will also tell you in those cases where the business is nonprofit, the groups that do situations where they buy out parks for the behalf of the residents, so become resident owned communities, even though it's a noble mission and an interesting concept, even in those cases, the rents still go up. No one talks about that, but the rents don't just stop. And in fact there are articles out there where people conjecture that the rents actually may go up in certain cases more when a nonprofit manages than a for-profit, because the nonprofit often falls behind on rent collections and other items, so they have to charge higher rents to offset greater bad debt. I know of one property that was taken private owned by residents, and then the residents said about to try and sell it off because they couldn't manage it. They couldn't keep the rents as low as they had been with a for-profit management.
So what does it all mean? It means that mobile home park owners do have a fundamental set of core beliefs that they must follow. Things that they should do. And I think we would all agree with that, but it also means there's another set of items that mobile home park owners shouldn't get involved in, aren't required to be involved in, and it's completely inappropriate to assume that they ever would or should be. This is Frank Rolfe, the Mobile Home Park Mastery podcast series. Hope you enjoyed this. Talk to you again soon.