Tenants billed directly for water/sewer by utility company

mobile home university
1

I’m doing due diligence on a park that is on city sewer/water and the tenants are billed directly by the utility company. I understand that this is a great convenience for a park owner since they/their manager don’t have to manage billing, tracking, collections, etc.

What ‘value’ might a buyer place on this convenience? E.g., would the park owner pay their manager less? Perhaps buy at a 9cap vs. a 10cap?

Any input would be appreciated.

2

There’s no question that it’s a plus, but not enough of a plus to be worth a huge deal more for the park. The going in cap rate is important, but what’s more important is what the rents can be pushed to in alignment with the market. We pay our managers about $10 per lot plus free housing regardless of whether they have to read the meters or not.