Valuating Fixed Fee Income


#1

I’m looking at purchasing a park that has average lot rents of 200 but requires tenants to pay additional FIXED monthly fees for items such as trash ($20) and maintenance ($50). The maintenance program only covers the lot for standard upkeep and not the actual MH. How do I evaluate these income streams?

Any clarification is greatly appreciated!


#2

This sounds silly.
You should adjust those fees so they are just part of the lot rent. Sounds like lot rent should just be $270.
If the tenants are required to pay these “fees” why not just say lot rent is $270 and includes trash?

You need to run the numbers on how you would run the park, not how the old owner does things. Sounds like a bunch of wasted mental energy separating the costs.


#3

I would just add to make sure the break outs of what ever you are billing is in compliance with state or whatever other regulatory body there is. I don’t know if thats the case here but just FYI .


#4

Is the community in a rent controlled state.
Additional fees are used to bypass rent controls.