income approach to valuing a MHP

When valuing a MHP by income. Do you only use the rent amount for a tenant owned lot only or would you also use park owned rent. in other words, would you count the park owned rent at the tenant owned rent rate.

Say $300 for lot rent and $800 for park owned rent. would you count it as $1100 or $600 for valuing the park.

What do you mean “park owned rent?” If you’re talking about mobile homes that the park owns, then you absolutely do NOT include them in your initial analysis. You’ll end up valuing the homes way too high if you do it like that. For instance, if the rent for a park owned home is $800/month, that makes the yearly income at $9600. If you use a 10% cap rate, that would put the value of that trailer at $96K which is way too high.

Analyze the park owned trailers separately from the rest of the park.

I’m looking at a MHP for $1.77Million.

42 lots.

23 TOH at $$305 per lot = $6960 per month

17 POH avg $833 per lot = $14155 per month

  • $1100 for stick built home per month.

Total Monthly=$22215.00/ $266K per year

Yrly exp @ $129K interest pymts include

nice well maintained park, most of the POH are 2001- 2015


Pass. That’s way too much. They’re valuing the POH’s too high. Really what you have is 40 lots at $305/month, plus some park owned homes and a stick built. Like I said before, you absolutely can not value the POH’s like you do the rest of the park.

Thank you for your answers.

How come you don’t value the extra rent from a POH? Wouldn’t that be of some value? If youre getting the extra income from the POH, wouldn’t that be useful if youre valuing the property from an income approach?

Thanks again for your time. I’m just trying to learn how to value a property. When I look at initial numbers with parks w/ POHs

What value would you put on the above park?

Reread my first post. I would value the lot that the POH sits on the same as the other lots, then use book value of the actual POH as guidance.