Mike H. I read "However, for mobile home parks, the depreciable costs are typically in the roads, water lines, sewer lines, electric poles and so on. These are considered land improvements for income tax purposes and are depreciated during a period of 15 years." I established their value by subtracting the land value from the purchase price. I may be wrong here, so looking for feedback.
As far as expenses, the owner provided his estimated expenses. Of course these will need to be verified during the due diligence. But when I asked him about it he said there really isnt much to maintain in a small park like this. Cutting the lawn, inspecting & pumping septic tanks, lighting, maintain fencing and signage. It's a small 2.5 acre park. There is a gazebo that needs to be power washed and stained each year. But besides these items, there isn't anything else. I've read expenses on MHPs are in the 30-40% range. But with a small park with few amenities, does the 22% seem unreasonable? What expenses can you see that may be missing?
Thank you very much for taking the time to review my plan and respond. I really do appreciate your help.
