Mobile home park calculators

[Rodrigo Santano]

Hello

I am familiar with the calculator under tools > Rental Property.  Is there a different calculator for Mobile Homes?  After all they probably depreciate faster in the books and have little to no appreciation, or am I wrong?  
Is there a different set of guidelines on how to evaluate, buy and rehab these?

Thanks in advance!

[Brenden Mitchum]

Hey @Rodrigo Santano, welcome to the BP community!

You should be able to get by with any typical residential calculator. I'm not familiar with BP's calculator but you shouldn't be including appreciation in your calculations anyways. Unless you have a crystal ball that tells you exactly what the appreciation will be.. But you are right that MH typically don't appreciate like SF (there are always exceptions). This is due to MH being personal property (like a car or RV) not real property (like a stick-build home and the land around it).

There are plenty more nuances to MH though that should be taken into account during your calculations and due diligence. Most of these center around the physical properties of these types of homes and the maintenance required. This will largely depend on the age and condition, but generally speaking, maintenance is higher than in typical stick-built (single-family) homes. You might be able to get away with doubling the number you typically use but better to determine a likely percentage increase based on each MH that you're analyzing. A brand new one might have pretty similar repairs/maintenance expenses while one that is 30 years old could be triple what you'd expect from a SFH.

Also, keep in mind that how you plan to structure your lease can have a significant impact on maintenance as well. If you just want a straight rental and are responsible for the maintenance, costs will be higher because tenants often won't keep the home nice. They may even trash it and strip it of anything valuable when they leave. Instead, you might want to consider some kind of rent to own agreement that makes them more responsible for the home. This can put all maintenance costs on the tenant (future owner) and allow you higher cash flow. The downside is that eventually you will lose ownership of the home.  

You also want to consider whether the home is in a park and you'll be responsible for lot rent or if it's on private land. This will have a major impact on your calculations. 

Lastly, there are numerous differences in construction between an MH and SFH so best to get acquainted with all of these. You really should treat this as a separate asset class and give it the time and attention it deserves, just like I'm sure you did when starting to research residential real estate investing.

Hope this helps a bit. Please, feel free to reach out anytime if you have other questions or just want to chat!

[Rodrigo Santano]

Quote from @Brenden Mitchum:

Hey @Rodrigo Santano, welcome to the BP community!

You should be able to get by with any typical residential calculator. I'm not familiar with BP's calculator but you shouldn't be including appreciation in your calculations anyways. Unless you have a crystal ball that tells you exactly what the appreciation will be.. But you are right that MH typically don't appreciate like SF (there are always exceptions). This is due to MH being personal property (like a car or RV) not real property (like a stick-build home and the land around it).

There are plenty more nuances to MH though that should be taken into account during your calculations and due diligence. Most of these center around the physical properties of these types of homes and the maintenance required. This will largely depend on the age and condition, but generally speaking, maintenance is higher than in typical stick-built (single-family) homes. You might be able to get away with doubling the number you typically use but better to determine a likely percentage increase based on each MH that you're analyzing. A brand new one might have pretty similar repairs/maintenance expenses while one that is 30 years old could be triple what you'd expect from a SFH.

Also, keep in mind that how you plan to structure your lease can have a significant impact on maintenance as well. If you just want a straight rental and are responsible for the maintenance, costs will be higher because tenants often won't keep the home nice. They may even trash it and strip it of anything valuable when they leave. Instead, you might want to consider some kind of rent to own agreement that makes them more responsible for the home. This can put all maintenance costs on the tenant (future owner) and allow you higher cash flow. The downside is that eventually you will lose ownership of the home.  

You also want to consider whether the home is in a park and you'll be responsible for lot rent or if it's on private land. This will have a major impact on your calculations. 

Lastly, there are numerous differences in construction between an MH and SFH so best to get acquainted with all of these. You really should treat this as a separate asset class and give it the time and attention it deserves, just like I'm sure you did when starting to research residential real estate investing.

Hope this helps a bit. Please, feel free to reach out anytime if you have other questions or just want to chat!

 Thanks a lot Brenden!