I just heard from a mobile home park investor, to consider pushing (widening) my guidelines to scoop up more potentials deals, and to even consider parks that don’t have city sewer. To leave out parks that don’t have city sewer will cut me out of at least 40% of the market. Why do you want City Sewer? It’s incredibly expensive, and most of the problems you will will have with your wastewater systems will usually happen in your park anyway, even with city sewer. And I still gotta pay to get it fixed.
I ask the question because Im still putting all this info together.
Private sewer systems like septic drainfields, treatment plant, or lagoon come with the risk of failing or non-compliance with EPA / other regulatory agency. If the system fails or needs upgrades, you will be on the hook for those costs, which can easily exceed 100K. Often much more.
I purchased a park on a lagoon, but with the knowledge that we could connect to the city’s line. It was a long process, but worth it in the long run. But I do not recommend it.
Connection to city sewer is much better and you will only have to repair sewer lines within your property.
Private sewer systems can be really bad or really good. Lagoons and WWTP’s have the highest replacement cost, but septic is typically manageable with a more distributed installation (e.g. 1 system per home).
Ultimately your due diligence will let you know what to expect and if you need to consider a price adjustment to offset the capital expenditure of new private utilities, or otherwise potential to convert to public service if proximity allows it.
A good set of septic systems can be operated for less than the cost of public sewer. But this is very installation, maintenance, and soil specific. Do your homework.
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You will have to take care of repairs to the underground piping infrastructure in either case (private or city). But with private sewer you are liable for treating the effluent also. The treatment method is regulated and as was already pointed out, can fail, requiring big bucks to fix. Even the underground can cost big bucks to fix. Do your homework!
All my parks are on Septic.
I would love to get city sewer. Over the years I have spent Hundreds Of Thousands of Dollars repairing the septic. $500K plus.
That being said, I don’t mind having Septic. I just plan accordingly. I charge a separate charge on the Rent bill for Septic. This allows me to pass through large expenses immediately. I also keep a large chunk of money sitting in the bank just in case. Matter of Fact Today I just wrote a $15,700 check to my septic guy and he is only half way done with the repair.
If you plan on buying a septic park just be sure you keep an appropriate amount of savings always at the ready.
AW
Everyone on this post seems to be spot on. There is nothing wrong with private utilities, but you have to be prepared to pay for it and for the liability that you assume. Some insist on public utilities, but others go the other way. The decision rests with you.
I’d be very curious to hear more details. What exactly is happening? Age of park? Homes to tank ratio, etc etc.