Adding a Laundry Facility to MHP - good or bad idea?

[Reid Hanley]

I am submitting a contract on a 22 pad MHP that currently are all POH. The rental rates are under market so there is good opportunity to increase NOI with rent rate increases. Another opportunity I see is there is a cinder block garage on the property that is not in use that has plenty of room to add some washers and dryers. None of the homes have W/D hook ups in them so I think this would be a welcome value add for the tenants. This would add additional revenue and further justify the rent rate increase. For those that have done or have thought about doing this what are the pros and cons? Any estimate of build out costs would be greatly appreciated.

Thanks BP!

[Chris Ebert]

I've thought about doing this myself but at the end of the day, the business model of operating a laundry facility is vastly different than operating a mobile home park. That's why when you go to sell the property this could turn potential buyers off. Where is the garage located on the property? Could you parcel it off and transfer it to a new LLC that owns and operates the laundry facility? That way you have two assets that you could sell separately when the time comes.