How you can Value a Mobile Home Park
Like most real estate the Seller usually wants too much and the purchaser wants to pay too little with a mobile home park. Certain buyers may have different motivations for choosing a certain park (1031 money, ability attain better financing, conversions to other uses, and location to where they live). In this book we will only look only in the value of a mobile home park for the typical buyer who continues to operate it as a mobile home park.
Anyone that has seen an appraisal on a house or most types of real estate will have heard mention of the 3 approaches to determining the value of that real holdings. They are the Cost, Sales, and Income System.
Unless you are coming up light and portable value of a brandname new mobile home park or one that is predominately vacant, I do avoid seeing any reason to use the cost approach. It is not likely that a new mobile home park will be built nearby and what it would cost to build an alternative park does not even take into account the amount of time, effort, and funds it takes to fill that park up with occupied and paying passengers.
As far given that the Sales or Market Comparison approach to value, this is also highly suspect. Individuals based on comparing the sale with the subject property with other recent sales and adjusting for differences that you may or may not know with reference to. Problems with this approach include varying expenses, rents, and management. Whether you are an investor or appraiser I would just use this approach as potential information and not draw any conclusions as a result !.
Lago Vista RV Park
2871 Hwy 72 W, Three Rivers, TX 78071
(361) 436-0845
