I’ve always bragged about having the best residents in the world. We truly appreciate the respect you folks have given me and my staff. Our team has worked tirelessly in an effort to assist you in making this the best place we can make it.
In that spirit of mutual respect, I want to be completely transparent with you about where we stand in our annual adjustment in costs and rents. There will be an adjustment this year. I know that it is a disappointment to many of you — and I want everyone to understand why and how we came to our conclusion.
First, let’s start at the beginning…
The Market & Competition:
We know that there are plenty of other parks in the area and we do regular assessments of them to see where we stand. We have the enclosed handouts for comparisons of the value you receive for the money you spend.
The first thing I want you to notice is that we are a great value for the money – we aren’t the cheapest park in the market, but we believe we are by far the best value.
We have spent literally millions of dollars in upgrades over the past 5 years. By doing so, we have surpassed many neighboring communities in overall quality of the property, and in our amenities and facilities.
One of the reasons our park has a different “feel” than our competitors is that we have more space and less density – which is to say, we have wider streets and larger lots than most other parks. In comparing parks, the measure used is Density per Acre, and ours is at 9 units per acre compared to the 12-16 units that are common elsewhere. That gives us that open “feel” that so many visitors comment on.
Costs of Operations:
Next, I want to talk about the cost of operating a first-rate facility like ours. Just looking at standard costs of operations, those hard costs increased about $700,000 over the past five years. Our real estate taxes alone have increased from about $90,000 per year to $175,000 per year -that’s a 195% increase. We’ve also seen substantial increases in water, sewer and utility costs. During this time, we’ve had extensive maintenance on road surfaces, as well as amenity improvements.
Some other factors to consider:
Largest Facilities per unit:
If you visit other parks, I think you will agree that our facilities are much like those in parks “two and three times” our size. I have heard from many of you that our relatively small size (685 & 791 units versus 1200-2000 units) adds to our appeal. However, offering big amenities in a small park does have cost implications.
Historical Values of Your Homes:
In my 40+ years in the real estate industry, I’ve come to understand the importance of value. The value of anything has to do with “supply and demand” of the product being offered. Thanks to upgrades, our product (that is, our park) has been in high demand. We have enjoyed close to 100% occupancy during our past seasons.
Since we took over operations in 2008 and 2009, we have invested millions of dollars in upgrades to our faculties and that has been good for everyone. While property values in many competitors’ parks are still below pre-recession levels, many of you have increasing home values. Together we are enjoying the greater value of being a top-quality park.
So, here’s the bottom line: As I mentioned, we will have an increase in rents again this year. Despite rising costs, the amount of increase will stay the same as in previous years, a $250 increase. This means that as a percentage increase to updated values, it is falling, but it is still an increase and I hope you will understand why it’s necessary.
We are grateful to have you as residents. We are committed to you. We are having this meeting now to simply give you time to check out other facilities if you do not trust our accompanying charts on values. 1 also realize that there are some residents who’d like to stay but are on fixed incomes and simply cannot afford the quality of park that we have become. For those of you in that category, I apologize. However, you can sell your home at a very nice market price and probably buy elsewhere for less money. You won’t receive the same quality of property, staff or amenity, but you can go elsewhere for less
money. We acknowledge we are not the least expensive. It is just impossible to create the quality of our parks without a cost.
We never promised we would be the “cheapest” in the market, just the best value for a high quality property.
We genuinely do our best to make this community your special home. Hope to see you next year! I will take comments and questions privately after this meeting.
Thank you for your participation and we wish you well this summer,
View Cost Comparisons vs. Other Parks (pdf)