The countdown has begun! It’s time to prepare rent increase notices for your manufactured housing community residents. While you may not be increasing your rents January 1, you are likely reviewing and increasing them soon thereafter. Though the process can be complicated, it is essential to schedule rent increases properly in order to maximize revenue. Below are important factors to consider when preparing your manufactured housing community rent increases.
Structuring Your Rent Increases
There are a few ways you can structure rent increases, depending on the individual agreements with residents:
Rent increases can occur on the same date for everyone (for example: January 1).
Rent increases can be rolling, dependent on each resident’s lease expiration date.
Rent increases can vary based on clauses in the lease or the prospectus.
Timing Your Rent Increases
When raising rents, it is crucial to follow your local regulations in terms of how much notice you are required to give your residents. For example, if you would like to increase your rents for January 1, and your local regulations require 30-day, 60-day, or 90-day notice, you will want to notify your residents according to the deadlines below:
5 factors to consider while Calculating Your Rent Increases
Once you have determined the structure of your rent increases and the required notification deadlines, you will need to calculate the amount of the rent increase. Below are important steps to take and factors to consider as you do so.
A Market Survey
By completing a market survey of nearby communities, manufactured housing communities, and site-built housing, you can understand how your rental rates compare within the geographic area.
Has the overall market increased at all?
Has the city reassessed properties recently?
What are the median rent costs in the area?
Your Budgeted Expenses
You will also want to revisit your previous budgets.
What have you budgeted this past year for property taxes, maintenance, and operating costs?
Are you staying within your budget consistently, or are expenses increasing?
Have you made capital improvements on the property beyond general upkeep and maintenance?
The Current Economic Climate
It is also essential to consider the current economic climate.
What does the job market look like around your properties?
Is the economy as a whole booming or heading for a downturn?
In a more individualized view, are you seeing any consistent signs of financial strain in your residents? What is the economic climate you might be seeing within your community?
The Benefits of Manufactured Home Communities
With every financial investment you make, there are costs and benefits to both you and your residents. When preparing rent increases, consider all the benefits and amenities residents enjoy while living in a manufactured home community:
Professional management to care for the maintenance and operations of the properties
Community guidelines for creating a great neighborhood
Potentially lower monthly costs
Resident screening (depending on your state’s regulations)
Location and proximity to local attractions
Possible Additional Factors
Many of the factors above play into your decision-making that is specific to your residents. These factors should be part of your overall consideration as well:
Review the history of rent increases. How recent was the last increase and by how much?
Are any of the properties you manage rent-controlled? If so, your local government will have precise guidelines for any increase in rents.
What is the current Consumer Price Index (CPI)? How does that vary from what your current rent is now and what it was last year?
You also want to consider your resident base. Who is your property’s target market, and how does that align with your potential rent increase?
Once you have determined how to proceed with rent increases, ManageAmerica has an easy way to structure even the most complicated rent increase scheduling. Our Lease Management System tracks and notifies you of sites with pending rent increases, enables you to calculate and schedule any type of rent increase, and even generates the necessary rent increase documents.
At ManageAmerica, we're not just a software provider but also a strategic partner that's uniquely equipped to help you streamline and grow your business. Contact us for a demonstration - never miss a rent increase!