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Updated about 5 years ago on . Most recent reply

User Stats

29
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1
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Ramon Pena Alvarado
  • Real Estate Consultant
  • Denver, CO
1
Votes |
29
Posts

Expenses of MH parks

Ramon Pena Alvarado
  • Real Estate Consultant
  • Denver, CO
Posted

Im seeing a few deals here and there in the mobile home arena. Im curious about the expenses attached to mobile home parks.
In multi-family its safe to say that 50% is a good number, but Ive been seeing 30-40 % expenses on some parks. Are the owners just fudging?? Or are expeses really that much lower on MHP's?Thanks...
Ray..

Most Popular Reply

User Stats

257
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58
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Mike Matthews
  • Investor
  • Houston, TX
58
Votes |
257
Posts
Mike Matthews
  • Investor
  • Houston, TX
Replied

No those #'s are true, MH parks have a much lower expense rate. You have dirt, Asphalt, Water, and sewer,. If you get each unit individually metered and bill back to the owners, 30% is a very average # for MH parks.



Why should you invest in a Mobile Home Park?

• Security Mobile Home Parks have remained one of the most stable and predictable real estate asset classes. Rarely will you see a foreclosure.

• The loan failure rate is nearly zero.

• In today’s economy, affordable housing is in HIGH demand.

• Much better returns than today’s stock market.

• Only the lots/dirt are rented, less maintenance problems.

• Average operating expense rate of only 35%. Apartments are in the 60%

• Much lower turn over ratio. Average home stays in a park 25 years. If they move it out. It costs over $3,000 so the home remains.

• When you raise rents by $10, $20, $30 or more in a park, it is less justifiable for a person to pay several thousands of dollars to move their home to save $ 30.00 a month.

• Increased depreciation rate over 15 years, which equals a major tax advantage.

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