POH maintenance and handyman costs


#1

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:

  1. 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.
  2. 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?

Thanks,
Peter


#2
  1. Reserves for Capital Improvements uses $50-$100 per lot per year. More if the homes are older.
  2. That will depend on the age of the home, the condition when you buy, the materials used by the last owner to repair it in the first place. As far as time, that depends on how good you fix them up first and how good your screening process is for tenants. That one is a have to find out as you go.
    Good luck and congrats on the Park.

#3

Thanks Pat. I’ve seen $50 /lot/year used as a general figure without POH for capital improvements. I think my annual maintenance costs for the POH will be well higher and want to make sure I’m budgeting enough for that. I see that MHU course materials quote POH R&M as $100/month, and that’s not counting vacancy, bad debt, evictions and filing fees, or turnover costs.


#4

$100/mo/home is a little high, but with 30 POH you need to be very diligent about finding a good handyman. I own 18 homes and have gone through 2 in the last year, finally have one who does good work for a good price. Plumbing and some electrical I still need to hire out. I figure $500-800/yr depending on age.


#5

I would do an inspection of each one and get Estoppels from seller at close so you know what repairs you were not told about. Also depends on how good a handyman you have and what they charge per hr or job