I’m trying to understand if I am off base with valuing this park.
9 lots, 4 TOH, 3 POH ( 1 double, 2 singles), 2 vacant but ready pads. The park is located 15 minutes outside a major metro. Park is good condition, road is well kept, water lines are newer (less than 5 years old). Tenants pay all utilities (water/sewer/trash/electric/mowing). The owners developed the park 20 years ago and does all the work. They do not track their time/work so the expenses are extremely low.
Current yearly lot rent $25,800. The 2 empty lots would add $7,200 total.
Yearly Taxes $832
Yearly Insurance $788
Yearly Licence $187.
The 3 POH rent for $295, $295, & $470 on top of lot rent. This is another $12,720 in yearly income.
They pay $285 per year for licenses on the homes.
I am about 1 hour away and would not be looking to do the maintenance or upkeep and already have a property management company in the area for other rentals. I am making some large assumptions here so please give your input.
For the park only - $200/mo for lawn care/snow plowing, 5% ($1,290 maintenance), 5% (Management).
NOI = 25,800 - 832 - 788 - 187 - 2400 - 1290 - 1290 = $19,013.
For the homes, they would sell for a total of $60,000 pretty easily, based on comparable. All lot rent is at market with not much room to move now. Based on park size and what other parks have sold for an 8~10% cap rate is reasonable. This puts the park value at $190k~238k plus the homes.
Where would you put the value? Thanks for taking the time to read this and answer.