Insurance and tax underwriting

Hi I am currently evaluating a mhp and wanting to see what is reasonable to pencil in for taxes and insurance. The property is a 37 unit with an apartment and Laundry. I have received the Property worksheet from the broker and the taxes are listed a 12k , and the Insurance is 5K. The MHP has an asking price of 2 million. I currently do not have a mobile home park and so can only use my limited scope of dealing with sfr, and multis for comparison. Is there a rule of thumb one uses to do this and are there any specific insurance companies that are more commercial savvy you would recommend so I may reach out to them personally. Thanks for any insight, Liz

I’d say the $5k is reasonable. There are threads on the forum, some of them recent, that illustrate the various coverages you should get and their rough costs. I’ll add that $2m could be on the very high side to pay for a 37 lot park if you have very few apts and few park owned homes (or park owned homes with very little value).

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For insurance, get a quote from three companies. I like Shelter.

For the taxes, contact the county assessment department and ask them how they would value a property that sold at X price. Ask them to assist you with calculating the projected property taxes for said property/value.

$5k for insurance seems high. Verify that the sellers aren’t including their vehicles or own home. Contact @KurtKelley at Mobile Insurance for a quote.

Insurance rates and needs vary dramatically by property type and location. And be wary of seller provided insurance expenses shown on income statements. They invariably show only general liability insurance, and don’t note any horrible coverage exclusions they may have.

These rates aren’t too far off for much of the country: (exclude CA, Gulf and Atltantic coast areas, high liability areas such as Chicago, part of NY, south Texas…)

General Liability Insurance
$70/rental home
$600/swimming pool
$250 per playground
$4,000 per $1,000,000 in home sales out of the park
$250 for hired/ non owned auto liability - ex. Manager using their own car for business
$250 for employee and tenant discrimination coverage

Property Insurance
.3% of gross annual income for loss of income
.5% of insured value for Site built buildings and park utility infrastructure
1.0% of insured value of park owned rental manufactured homes
2.0% of insured value for signs


Thanks Kurt,
Could you clarify when the 4k -10k comes into play " in home sales out of the park" . Not sure what you mean by this. Are these on homes purchased outside the park and then brought in?
Kind regards,