MHP - How much do new mobile homes increase the MHP LAND value?

[Andy Kelly]

HI All - I'm looking to understand how new mobile homes affect the land value of an MHP. Any thoughts would be hugely appreciated. 

Question - If you are the landowner of a MHP, what is the incremental value to the LAND if a new mobile home is placed on the land?

Example - A MHP has a land value of $1,000,000. It has 100 homes on the lot. 99 of them are brand new mobile homes and there is one mobile home that is a complete tear down. In your opinion, what is the LAND VALUE of the MHP if that single tear down gets replaced with a brand new Mobile home?

In other words, Does 1 new home increase the value of a 100 lot park by 1%? 0.5%? 2%? 

Thank you!

-Andy

[Edward B.]

@Andy Kelly,

@JC K. pretty much nailed it. As an investor I would look at it this way. When I evaluate a park, I value the land (MHP itself), park owned homes, and park owned notes (seller financed/rent to own) all separately. 

So, in your scenario. If you rented the lot for $200/mo and the overall expenses remained the same, then the LAND VALUE (or value of the MHP itself) would increase by $200*12= $4800/10% cap rate = $48000. All else being equal. Additionally, if the mobile home itself was worth $10k, I would consider paying for that minus my costs to sell it to an owner occupant.