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’ This is a great question that will help you figure out what amount to list your property for, what kind of offers you can expect to get and which of these offers will be worth accepting. In the tough real estate market, investing in a mobile home park is a beneficial deal. From lower cost to easy maintenance and less tenant turnover, there are plenty of perks to enjoy.
All of the above assets should be assigned a value at the onset so that you can establish a basis for depreciation. If you have just purchased a park, you will need to complete an analysis of the assets (tangible & intangible) and assign a value to each for tax purposes. Depreciation is a yearly tax deduction for the purchase of certain property used in your business. It is an allowance for the property that will deteriorate, lose value and wear down over time.
Do mobile homes hold their value?
This can considerably slow down your time to sale, simply because buyers must either take out a high-interest loan or come up with the capital in cash in advance. This difficulty stems from the fact that mobile homes are considered property and typically registered as motor vehicles, even though most of them are never moved. Just like with selling a house, you set a price, accept bids from interested buyers, and eventually make a deal to sell the mobile home. You keep all the profit, and you get the maximum sale price for the home. Selling a mobile home park can be a great way to cash in on your investment. If you want to make selling your mobile home park as simple as possible, talk to Mobile Home Community Buyers.
When you purchase a new park, I recommend that you complete an assessment of the assets of the park. Not only the obvious assets listed and disclosed in the seller’s disclosure, but a comprehensive analysis of assets that have value and may not be obvious that can be depreciated as discussed above. This is the staring point for your “basis” and supporting this deduction that is often under reported.
HOW TO DISCOVER YOUR HOME’S MARKET VALUE
This option is advantageous for a number of reasons and can be the better option for many mobile home owners. Like with retail, there are several considerations and drawbacks and you should take care to consider all of your options before you make a decision. You can get into a deal that’s got high inflated lot rent numbers, which is pretty normal.
While there are free and low-cost marketing resources, you should factor marketing in as a cost. This means that it’s an important factor in picking a home for most people as they will spend a lot of time here. Having a modern, functional, and appealing kitchen can be a big selling point. The appearance of your home’s exterior includes how well it’s maintained.
The Expenses the Owner Is Paying
If you want a 10 cap on a property priced at a 7 cap, it does not necessarily mean you should pass on the deal. For instance, what if the park has rents that are $50 under market and through your inspections and due diligence you know you could raise the rent to market rates in 2 months. Park Rental – If you are unable to live in the mobile home until the sale, you must factor direct park rental costs into your calculations.
A simple way to think about the cap rate is that it is the return you will receive year one based on the current projections if you were to pay cash for the property. If you put $1,000,000 cash into a CD, you can expect somewhere in the 5% range for your money. Obviously, if you were to put $1,000,000 of cash into a mobile home park where there are risks and time involved in managing that investment, you will want more than a 5% return on that money. Cap rates have been all over the place in that last few years but they are once again rising.
We will evaluate your home, make you a reasonable offer and get you your money quickly. We buy homes in any condition to take headaches off your shoulders. Unlike with retail where you must market, show the home, and ask permission from the park, selling wholesale is fast and painless. The wholesaler will offer a rate and if you accept they will immediately close the deal. This sale will go through instantly and parks cannot stop the sale due to repairs needed and cannot deny the sale as the home will be moved off the lot.
Deprecation is a combination of all of the other factors we’re talking about today. It includes everything from location and market to age and cosmetics. We’ve already touched on all of those, but since depreciation in mobile homes is such an important subject and has so much bearing on your mobile home’s value, it’s worth explaining. Market Demand – If you’re in an area with a high volume of mobile homes on the market, you have a much smaller chance of getting your asking price if it’s higher than others in the area.
The average value of a new manufactured home is about $74,000. Material choices that can make a home more valuable than the average are things like hardwood cabinetry, finished drywall versus wallboard, energy-efficient windows, upgraded lighting, and six-panel doors. Either way, understanding the value of your park is a critical next step. In some cases, you will be able to fill up the homesites with minimal investment and effort so you may place a value of 25-50% depending on your comfort level.
Looking back on the prices of new mobile homes you can see that there is a huge difference in the values of the different sized homes. This will need to be factored in when you try to estimate the value of your house. Unlike the other categories, there isn’t a specific size range for triple-wide manufactured homes. Their size and shape are widely customizable which means their size varies considerably. They can be up to double the size of double-wide homes at around 4000 square feet. Due to their smaller size and difficulty in obtaining financing, they are normally valued far less than other types of manufactured homes.
It is imperative that you discuss with a professional to assist you in determining the FMV, basis and allocation of value to each of the assets purchased. Novi Home Show to Include 5 New Manufactured Homes The Novi Home Show, Oct. 11-13, will include five new, fully-decorated manufactured homes from some of... The company has more than 550 inspectors across the country and can provide you with a written appraisal report within six days in most cases. You can select all of the criteria, from geography to floorplan, and find the homes that are most like yours. For instance, if you have a 40×48’ 2006 Palm Harbor in an Orlando retirement community, there are similar homes in the MHVillage listings. Searches that meet these criteria will reveal that homes are selling for about $130,000.
Analyzing the market can also tell you which neighborhoods are seeing a lot of new people moving in and which are seeing a decline in residents. So many specific things about your mobile home influence its market value. But while the home can influence the market value, it can be the other way around – the market can impact the home’s value. Your local mobile home and real estate market can greatly influence your mobile home’s worth.
If the park is on the market for $1,800,000 or less than I will probably look into it further. Remember this simple calculation is very generic and may or may not be the true indication of the value of a mobile home park. Most lenders review appraisals through a strict system of checks and balances that compares the appraisal report to other appraisals on all known sales in your neighborhood.
Direct sales are ideal if you can’t sell quickly, have high rental fees to consider, or need the money from the sale upfront to invest in a new home or opportunity. The most difficult step to selling a mobile home in the retail market is getting park approval to complete the sale. Most parks will deny your request to sell if the buyer has poor credit or a criminal background or if your home needs repairs.
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