Profile of the Project
Bottom line: We renovated a dilapidated mobile home and made $2,200 upon the sale and $5,100 in lot rent collection revenue the first year after renovations.
- Location: Central Florida
- Type of Real Estate: A ground lease mobile home community
- Scope of project: Acquisition, renovation, and disposition
- Renovation Cost: $7,766.75
- Length of project: 2 weeks to renovate, 4 months to sell
- Average Rent of Park: $375 per month
Before and After
We took the home back as a result of an eviction due to a non-payment of rent. Rather than turning around and reselling a dilapidated home, we chose to reinvest some money into it. Problem? They had a major bug problem (among other issues):
If we had decided to handle this renovation project as a “handy-man” special—fixing the bare minimum just to resell it as quickly as possible—we would have attracted a different clientele. From my
We invested $7,766.75 into the home and sold it for $2,200 profit. Not only did we make money selling it, but we improved its value. In the
- Made money on the sale of the home
- Created a higher value home, so hopefully more consistent tenants will stay in the future
- If we increase rent in the future, future tenants will be more likely to afford it
The result is that we not only got back our initial investment; we also made a profit on the sale! Moral of the story: Investing
Lessons Learned from the Project
This project reinforced what I preach all the time: If you have the capital, always reinvest back into the home instead of just flipping it. If you get a home back from a tenant, and you’re motivated only by lot rent, you’re not adding value to your tenants, just putting a bandaid on it.
To fix it the right way, spend the money to renovate the home. This doesn’t always guarantee a return on the investment; there’s always
Then, consider if I hadn’t renovated! There would have been an even more intense bug problem, which is a major problem for the future. That’s why I included
Renovate and add value, and everyone will be better off—that’s what I learned!