I’m under contract to buy a ~100-space park in the midwest. When we negotiated the contract, I thought the park had relatively few POH, but it turns out to have about 30%, a mix of older homes and new homes brought in under the CASH program. I’m adjusting my pro forma and cash flow models to take this into account. My questions are:
- What kind of effective maintenance reserve do people usually factor in for POH, both annually and when residents turn over, and is that different for older homes versus new homes? I’d prefer to get the homes out on RTO contracts, but that may take some time, and as long as they remain POH I’d like to budget a reasonable amount for annual maintenance as well as cost to turn the home around whenever there’s tenant turnover.
- How much extra time for the handyman would you budget to maintain those 30 POH versus if there were only a handful? Is there a rule of thumb for handyman time allocation for POHs?