Posted by Ernest Tew on January 18, 2001 at 18:57:56:
Marc, unless there are changes in the tax law that i’m not aware of, multi-family rental properties including parks can be depreciated over 27.5 years.
The total depreciation deductions in a park (relative to cost)aren’t as different from apartments as one would might think. While parks may not have as many buildings, they usually have a lot of other depreciable assets, most of which are underground. Paving and all underground utilities can be depreciated–often over a shorter period of time than the buildings.
I have completed a spreadsheet that generates the Annualized Property Data, Cash Flow Analysis Worksheet, and Alternative Cash Sales Worksheet forms used by Certified Commercial Investment Managers. These quickly tell me the Internal Rate of Return on any income property and helps me figure the price I should charge. However, with mobile home parks, there are a couple of variables I don’t know and could use input from this group.
What is a typical land/improvements value for mobile home parks? It has to be quite a bit more heavily oriented towards the land side than typical income property.
Is the depreciation rate for MH parks 27.5 or 39 years?
Re: Valuing Mobile Home Parks - Posted by JeffreyTX
Posted by JeffreyTX on February 14, 2001 at 13:31:47:
I have recently begun researching what it would take for my partners and I to build a MHPark or two (or three or …). I was going to build my spreadsheet in a couple weeks, but it sounds like I would be reinventing the wheel. I would be interested in talking with you about what you have already done. Please contact me via email.