I have a 73 pad park in a high demand area, and the lot rents were just raised to $390.
There is a 250 foot stretch along one of the roads that is undeveloped and well located.
I have no idea how open the local government would be to allowing me to increase the occupancy. However, has anyone built out a park before, and what was the approximate cost per pad? (road is already there, and all utility lines likely run past the lots through the main road)
Any thoughts on the general lot rent level when building out more pads starts to make economic sense?
Your cost to add lots is very much dependant on how you build out. Are you contracting or doing the work yourself, are you pouring a pad or footings, are you buying homes to resell or having applicants bring in their own homes.
My decision to build out would depend on the same principal as buying a community. I would expect a 10 cap or better on the cost to add each lot. In your case that sounds doable but you need to get contractor estimates before spending money on permits.
The MHU Home Study Manual talks about this, but in short the average is 10K per pad.
Frank and Dave have done this too, and their logic is that getting to 100+ pad parks can pull a premium upon sale and are considered better investment grade.
You can also consider the CASH program to bring in new homes (there is a podcast or two on the site). If I remember right that program can finance part of the pad prep as part of the transaction…
If I remember correctly, the general rule of thumb is 100x the lot rent. So, you don’t want anymore than $39k per lot (including the home) in your case. I’m sure someone will correct my recollection of this rule. @Jefferson@frankrolfe
We have a similar situation in a park that we own. It has a road with lots only on one side of it. In our case, we can only probably put 4-6 homes before we run out of space on that side of the road. In talking to the city about it, they wanted us to run a brand new main water/sewer line just for those lots and be on a separate master-meter. That’s as far as I got with them up to this point. Since they won’t let us tap into the existing water/sewer, it’s not been worth the hassle yet to pursue it further. I’m just throwing that out there since you may run into the same situation with your city.