What deposits should I expect to get on a park with $200/month rents? Historically it has been getting $250. Is it very feasible to get much more than that?


No, that amount sounds about right. Of course, if you can get more, great, but that’s the industry norm.

Thats what I suspected

Thanks Frank,


Are you getting these deposits on lots which have homes on them owned 100% by the residents? If so, why do you need deposits on lots? We only charge deposits on homes, not lots.

Long time viewer of the website,…first time poster. I have recently tied up a park located in my hometown in WA. state. Park is 62 spaces consisting of 59 owner owned mobiles, with 3 park owned units( which we plan to sell upon taking ownership) and 1 stick built house. Lot rent is $325 with no increase by the owner since 2009. Presently I own other multi-family apts, retail, and office properties, this would be my first park. This sale also comes with a mini storage located next door. Questions: current owner pays for water, sewer, and tenant pays for garbage. Is the main advantage for billing back utilities to make sure you have your cost for those covered each year,…or are there other advantages, or disadvantages? Water, Sewer costs on a per lot basis presently run about $60 per month. Thoughts? Second question: The park was constructed in 1980,…so homes vary in age,…but most in the 25-35 year range. The park is what I would call average quality,…some with pride of ownership,…others not so much. Presently park rules are not overly enforced by onsite manager. There are certainly a number of parks in our area with this age of mobile, but does the age of this park or these units raise any concerns for those of you seasoned park investors? Options are limited for moving, as other parks are full, or even more expensive. Ground is very expensive due to geography of our area,…so it is a percious commodity.

Lastly,…the park is located next door to some strong retail tenants ( Costco, Safeway, Walgreens) all with newer construction,…and there is a likely hood that at some point going forward ( 2-5 yrs) the property could be worth more with a different use. I believe this would be a good problem to have,…but am throwing it out in case anyone has any thoughts.

I have lots of questions, but this post is long enough. I appreciate any feedback or suggestions.

C. Quinn

The value is roughly 62 x $325 x 12 x .6 x 10 = $1,450,800 at a 10% cap rate. Is this close to the price you’re looking at? What is the market rent or any factors to reasonably increase the valuation if it’s not?

I would not use the future value of the land argument unless you are a professional land speculator – I know way too many people who bought under that argument and then are unable to find any end user willing to pay a price anything close to what they thought it would be worth.


Park is priced at $2,000,000. NOI on the park is $165,000 annually. This would make this an 8.3% CAP,…which for our area is good. this also has a single family home on the lot,…and 3 of the mobiles are rentals,…so overall gross rev is at $265,000. Property also has 2 additional lots that have never been developed, which could increase revenue. Lot rent has been static for the last 4 years due to absentee ownership,…so rent is under market by about $25 per lot based on similar parks with similar units and utilities in our area,…so definitely upside potential to ease rents up over time.

I am not counting on alternative options for the land,…buying it as a MHP and running it that way,…probably should have just left the comments regarding the land out of the equation.

Kind Regards,

C. Quinn

Based on what you’re saying, the park could work for you if that return level meets your goals. If you raise rents and do everything discussed, you might be able to get to 10% on the cap rate, but you have limited upside from there, other than the occasional rent raise (which may only cover the perpetual slight increases in costs, such as insurance and property tax). So if a 10% cap rate with no upside works for you, then this deal may be perfect (it’s hard to find cap rates of 8% in that part of America, I’m fully aware).

We’re always looking for deals that have a 10% cap rate going in, but have a mid-teens to 20% cap rate when fully optimized. But there is no law that demands this. You have to choose what works for your goals and act accordingly.

The largest owners of mobile home parks in the U.S. – the REITs – buy 6% cap rates frequently. That meets their goals, and everyone is happy. Only you can decide if this works for you.