i am looking at a 52 space park - 41 of the spaces are occupied with all tenant-owned homes. They currently get $345/mth lot rent and that includes utilities (public water and sewer). The other neighboring parks are on WWTP and charge $275+$70 ($345 total) for utilities.
I can buy this park at a 10 CAP off of current income. Do you still feel it is worth purchasing if rents are already at market levels? One thing i was thinking of doing was lowering lot rent by $20-$30… and sub-metering the utilities (which would be an ~$30K/year net boost to NOI). Also, just b/c it is as market-rent levels, can you typically still institute rental increases each year of $5-$10 when it’s all TOHs?
MSA is ~75K but close to bigger cities and population has increased 25% on BetterPlaces. Ave home price is $135K and unemployment is 4%.
Thanks in advance!