Rent or Sell Park Owned Homes

I just talked to the appraiser and he said he only includes the lot rent in the valuation. We just bought another park and this one has a lot rent at $515 but the park-owned homes are rented between $900-$1200. I’m thinking if the valuation will include the home rent, then the value should have been doubled. I’ve been seeing parks for sale and they priced it including the revenue on the home rent. I’m just trying to decide if I should keep the homes or sell them. Based on my analysis, if I keep the homes, the home rent can probably generate $400K of value at 10% cap, or sell them and probably generate $200K-$250K if I seller finance for 5 years. Thoughts?

Sell them.
If you want to own the units go buy apartments.


Sell them.
Long term after maintiance and all other related expences your profit on the home portion of the rental will be zero or so low it will not make it worth the work to keep them.
SDGuy is correct, the maintiance cost on a appartment will be less than on mobile homes. Less time, less money, fewer headaches and probably a better class of tenant.


Congrats on increasing your portfolio!

I understand your desire to make a little more money, but then you are missing out on what makes MHPs prime real estate. Not owning the homes means you are not responsible for maintenance of the home inside and out. Yes, you may make more money by renting the homes, but you will spend more time working IN your business than ON your business.

Good luck

It’s a pretty simple question.
All things being equal would you pay $400K for a bunch of used Mobile Homes?
Highly unlikely,

I see a park with a bunch of POHs as being overall unattractive. It speaks to demand.

If you can’t sell a $10-20K mobile home in your park, the area’s demand is too low.

I would sell them. My partner wanted to rent the homes on the first park we bought. She loved it. She was always busy every day after work and all day on weekends. It was a rush for her. People would move in and talk the talk and pay about 3-4 month’s rent.

Then they would quit and pay later. Maybe the 10th or 15th of the month. Then we would evict. Then we would spend about 2000 dollars fixing it up and repeat. It was so awesome that we just couldn’t stand the rush of people not caring about our investment and destroying it.

6 months in, we decided to try something different. Maybe we sell these homes and make homeowners out of these people. To our surprise, they were willing to pay for these houses (often with cash in total) and become homeowners. A very strange thing happened then. They started mowing their own lawn and planting flowers. Then they would call about so and so who acted like they may be selling drugs and needed to go live elsewhere. Even gave us names about family and friends that just might be interested in buying that home.

Homeowners make better communities. Hands down no exception. If you treat them right, they will invite you to dinner. Renters make for a devil may care what the neighbor does type of community. Sell those babies and everyone richer. This includes you as well as them.

As far as the valuation, only lot rent will be included for any bank loan. I have yet to find a banker that will include rent yet. I have excellent credit too. They just won’t do it has been my experience. The first park I bought, the bank would only finance the land value That was all. The owner had everyone pay cash and showed no money coming in.


I know I’m late to this party, but for the benefit of anyone else who may read this in the future I’ll add my two cents worth.

I started into the mobile home business buying individual homes and reselling for cash or as a lease purchase or other form of note sale. If done correctly, this can be the best of both worlds. You can get a good quality “tenant buyer” who has enough skin in the game that they will actually improve the mobile home instead of destroy it, and you will make a lot more money off the homes than if you sold for cash.

I will mention that this is essentially a business model of it’s own that couples nicely with owning parks, however it does require that you learn the skills and develop the systems to make it effective. I learned how to do it from John Fedro (you can find him on Youtube).

If you are looking for the least amount of work, then I’d advise you just sell the homes for cash if you can. If you’re looking for maximum profit, then selling as a Lease Purchase is the way to go in my experience.

Rent to owns are not a whole lot different than rentals except you encumber them long-term and make the homes less valuable. The tenants usually still treat them like a rental and if you sell the park, park buyers will always take the lower of the collateral value or the balance due on the note.

Sell them for cash or put in a 3rd party finance program to lend to the customers. It’s better to hold the home vacant for a little longer looking to cash out of it than to put together a rent to own agreement. Sometimes you have to but I usually avoid rent to own unless it becomes the only option to get it sold.