How Much Can You Sell a Mobile Home Park For?

When investors are looking at buying your mobile home park, they are interested in one number, the cap rate (also known as the capitalization rate). This is the ability of the park to net a return on investment within a specified time. For many older parks, the owner likely hasn’t raised rent significantly to generate a potential buyer enough of a profit. In situations where there is an older park with a lower cap rate, it might be suitable to seek a fast cash offer on the mobile home park if you are seeking an exit strategy.

How much can you sell a mobile home park for?

The exact asking price for a mobile home park depends upon a lot of different factors. An older mobile home park with lower rent might sell on a website like BizBuySell in the low six figures. A mobile home park in a more desirable location with better rent can go for $1 million or more. Most mobile home park sales occur through non-traditional channels, such as a cash offer buyer or real estate investor. The number of people competing for a mobile home park is typically smaller than other types of commercial real estate transactions.

How does the capitalization rate work?

Let’s say that you sell your mobile home park for $250,000. If the mobile home park has ten lots that generate $250/month worth of rent, the annual income of the park is $30,000. In this situation, the capitalization rate is 12%. The average capitalization rate for mobile home parks is about 7% to 12%. A 12% cap rate will let the buyer recover their investment in about 8.5 years. A lower cap rate will take longer. Let’s say that the same mobile home park selling for $250,000 had a lower rent, $150 or $18,000 per year. That same unit would take 14 years for the investor to pay off. With a lower capitalization rate, it will be harder to find a buyer for a park.

How much money will the investor have to put into the park?

Another factor that will impact selling price is how much work the investor will have to put into the park. Most investors will likely set aside 1% to 5% of the rental income annually for capital improvements. Much more than this, a potential buyer might walk away from the deal on your mobile home park. Major upgrades to the park might eat into the cap rate of the park. If your park already has a good cap rate, $30,000 to $50,000 could add as much as a year or more to the time that the investor takes to recoup their initial investment into the mobile home park.

Utilize a mobile home park buyer for a fast cash offer

If you are looking to get out of your mobile home park, but you know it has issues, work with Mobile Home Park Instant Offer. You will get a fast cash offer in as little as twenty-four hours and can potentially close within seven days. Your fast cash offer is great if you:

  • Know your park has issues, but don’t want to remodel the park.
  • Lack modern park amenities, like submetering.
  • Are having a hard time finding a buyer for the park through conventional channels.