Mobile Home Park Valuation Calculator

About the Mobile Home Park Valuation Calculator

Mobile home parks (MHPs) represent one of the most compelling sectors in commercial real estate. They offer high cap rates, recession resilience, and a natural barrier to new supply (zoning restrictions make building new parks nearly impossible in most markets). Valuation follows the income approach: lot rent times occupied pads times 12 months, minus expenses, divided by the cap rate.

This calculator computes MHP value using the core metrics: total pads, occupancy, lot rent, and operating expenses. It differentiates between park-owned homes (POH) and tenant-owned homes (TOH), as parks with mostly tenant-owned homes are valued more favorably because the park collects rent without bearing home repair costs.

Whether you're evaluating an acquisition, modeling a lot rent increase strategy, or estimating value after filling vacant pads, This calculator gives you a clear picture of MHP economics.

Homebuyers, investors, and real-estate professionals all benefit from precise mobile home park valuation figures when evaluating properties, negotiating deals, or planning long-term investment strategies. Save this calculator and revisit it whenever market conditions or your financial situation changes.

When This Page Helps

Mobile home park valuation has unique factors: lot rent vs. home rent, POH vs. TOH economics, and lot fill strategies. This calculator handles these nuances so you can accurately value parks and model value-add scenarios.

How to Use the Inputs

1. Enter the total number of pads/lots in the park.
2. Set the number of occupied pads (or the occupancy rate).
3. Enter the monthly lot rent per pad.
4. Add any additional income (POH rent, laundry, storage).
5. Enter total annual operating expenses.
6. Set the cap rate to calculate value, or enter the asking price to calculate the cap rate.

Example Calculation

Tips & Best Practices

• Parks with mostly tenant-owned homes (TOH) are preferred — the park has no home maintenance costs.
• Lot rent increases of $25–50/month add $300–600/pad/year to NOI, multiplied by cap rate into value.
• Vacant pads represent the biggest value-add opportunity — each filled pad adds annual lot rent to NOI.
• City water/sewer is preferable to private well/septic due to lower maintenance and cap-ex risk.
• Mobile home parks have expense ratios of 30–45%, among the lowest in commercial real estate.
• Due diligence must include utility infrastructure condition, especially water/sewer lines.

The Mobile Home Park Investment Thesis

Mobile home parks benefit from a unique supply-demand dynamic: demand for affordable housing is growing while new park supply is effectively zero. Municipalities across America have stopped approving new parks, making existing parks increasingly valuable as irreplaceable assets.

Value-Add Strategies

The three primary value-add levers in MHPs are: raising below-market lot rents (many parks charge $200–300 when market supports $400–500), filling vacant pads (buying used homes and placing them or offering move-in incentives), and converting POH to TOH (selling park-owned homes to tenants to reduce expenses). Each lever directly increases NOI and value.

Understanding Expenses

MHP operating expenses are remarkably low compared to other asset classes. There are no roofs to replace, no HVAC systems to maintain, and no interior finishes to refresh. The primary expenses are property taxes, insurance, management, water/sewer, trash, and lot maintenance. Well-run parks operate at 30–40% expense ratios.

Frequently Asked Questions

• How are mobile home parks valued?

  MHPs are valued using the income approach: NOI / Cap Rate. The primary income source is lot rent (the fee tenants pay for the land their home sits on). Unlike apartments, the park typically doesn't own the homes, making the income model simpler and expenses lower.

• What is lot rent?

  Lot rent is the monthly fee a tenant pays for the right to place their mobile home on a pad in the park. It covers land use, access to utilities, and community amenities. Lot rents range from $200/month in rural markets to $1,000+ in desirable locations. It's the park's primary revenue source.

• What is a good cap rate for mobile home parks?

  MHP cap rates range from 6–7% for institutional-quality parks with 100+ pads in strong markets to 8–12% for smaller parks in secondary markets. Infrastructure condition, lot rent relative to market, and TOH vs. POH ratio all influence cap rate.

• Why can't tenants easily leave a mobile home park?

  Moving a mobile home costs $3,000–10,000 and often damages the home. Many older homes cannot be moved at all. This creates a captive customer base with very low turnover (2–3% annually), making lot rent income extremely stable and predictable.

• What is the difference between TOH and POH?

  TOH (tenant-owned homes) means residents own their home and rent the lot. The park has no home maintenance costs. POH (park-owned homes) means the park owns the homes and rents them out. POH generates higher revenue but involves home maintenance, higher vacancy risk, and lower valuation multiples.

• Why are mobile home parks good investments?

  MHPs offer several advantages: affordable housing demand is growing, new supply is nearly impossible to build (zoning restrictions), tenants are sticky (moving costs are prohibitive), expense ratios are low, and cap rates are higher than apartments. They're considered one of the most recession-resistant asset classes.