Local demographics are a critical aspect of your due diligence. These don’t refer to racial demos. Instead, we’re looking for the unemployment rates for that zip code. Also, what is the median house priced at for the area? Depending on the demographic system you’re using, it might give you different results.
We tend to use a program called bestplaces.com. This is a common, free service that a lot of people in this industry use. This site shows you the growth of your target city, county, MSA, and state. It will show the size and growth of the population over the past ten years. This includes the noted unemployment rates, median home values and more.
Why Are Demographics Important?
Knowing this kind of information can help you determine if buying a park in that area makes sense for you. For example, if the home values are in the mid tens of thousands, it may not be worth the value. This is especially the case for first time buyers.
The age range of the area can also clue you into the corresponding demos. If the age range is consistently higher, it’s likely a retirement heavy area. Likewise if the average age is low, it’s likely a college town. If it’s around 35 years of age, it’s likely to be a more metropolitan area. These stats vary, of course. Knowing these can give you a solid idea of who your tenant base will be.
Why Income Matters
The median average wage or salary is very low, that could also mean it’s either a retirement or college town. But, it could also mean it’s an depressed area. This means little economic activity. Each of these areas have strong implications on what it would be like to purchase a park there.
You also want to know the local rents in the area. For example, if the average 2BR apartment rent is $1,000, you know you have some room on your lot rents. In this case, it’d be within the $400-$500 range. But if that same figure is only $600, you may be limited to a $200-$300 rent. This may cause you to adjust your approach.
What’s A Feasible Price Range?
If the average apartment rent is $600, you’ll likely want to avoid this area. The noted $200-$300 figure simply isn’t enough to support a park. “Most of the time, it’s a challenge,” says Glenn.
Demographics are a pretty important study when it comes to the mobile home park process. It’s integral to the proper due diligence. That said, it’s not something you spend massive amount of time and money on. Just educate yourself on how to spot these figures and handle them accordingly.
The Mobile Home Park Expert
The Mobile Home Park Expert can help you identify the local demographics in your target area. Are you looking for support in this area and more? Reach out to us today. Regardless of your need, we can point you in the right direction.