Does the location of a park factor in when determining value? There is a park that has frontage on Lake Huron that I find intriguing. I am new to all of this and would like to make sure I am properly figuring things out.
Location is extremely important. The old saying goes Location Location Location for a reason…
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market economics will dictate if you have affordable housing needs in the area. What are the apartment rents? What’s the median home price?
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Being in a “good” area will matter. School districts, close to shopping, etc. You will want to know if you are in the “bad part of town” as sometimes you cannot fix it. Run a test ad and see if people truly wanna live there.
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population of the town or metro do matter. You don’t wanna be in a location where you cannot replace tenants. 50K should be the minimum.
Best of luck!
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Location will determine your Cap rate.
For example: If you have MHP in La Jolla CA that has a $100K NOI it would be worth $2.8MM using a 3.5% Cap rate.
If you have a MHP in YUMA Arizona with a $100K NOI it would be worth $1.3MM using a 7.5% Cap.
Same Park in Flint MI would be worth $830K using a 12 Cap Rate.
La Jolla CA is very desirable Real Estate. Yuma, AZ is fair, Flint MI (toxic water) is undesirable.
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Parts of Lake Huron are very nice and some just a mosquito haven. If you connect to the resort side could be very profitable but state government is presently negative to small businesses. The Grand Rapids side is another story. good!!
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