How do you calculate value of a park value with a single family home in it? I know how to use the formula to evaluate a park but how about single family.
Two ways to evaluate:
- Comp sales approach (Can separate from park)
a. SFH rental in parks: 60-70% (or less) of comp sale value.
b. Also, be sure the bank will let you sell it… - Income approach
a. If home rent income was as valuable lot income then we would all buy SFHs instead… after all, there is more of them,
b. Rental income from SFHs is evaluated at a higher CAP rate than lot rent. Subsequently, we generally offer between $0-$30k on SFH that can’t be subdivided.
In reality, this income source shouldn’t sway your deal. We have generally given a quick value of $20k-$30K to his just to have something to go off of. Personally, we hate SFH. It’s not a bonus.
Understood but the seller tries to make it as the huge bonus. Thank you for the explanation.