Mobile home park calculator: lot rent to NOI, value per lot, loan & IRR
Read first. Example inputs, not benchmarks or market data. Not financial, investment, lending, appraisal, legal, or tax advice. Check every input against the park's rent roll, lease terms, trailing twelve months of operating statements, utility bills, the tax assessor, and a lender term sheet. Lot rent increase notice and limits, utility billing rules, and park licensing vary by state and city.
Year-one NOI
$358,837
Value at your cap rate
$4,784,493
Value per lot
$47,845
Max loan
$3,150,000
Year-one DSCR
1.46x
Levered IRR
17.5%
89 of 100 lots are occupied (89.0%), and park-owned homes bring in 16.6% of rent. Expenses run 38.0% of EGI. NOI covers expenses down to 31.5% occupancy and covers the loan down to 70.8%. A $25 lot rent increase adds $305,368 of value at your cap rate.
Year-one income and expenses
Year one
Amount
% of EGI
Per lot
Gross potential rent (every lot and park-owned home rented)
$597,600
101.2%
$5,976
Vacancy (empty lots and unrented park-owned homes)
Economic occupancy (rental income ÷ gross potential rent)
88.9%
Park-owned home share of rental income
16.6%
Park-owned home rent above lot rent (what the homes earn)
$50,400
Bill-backs ÷ utilities the park pays
85.4%
Expense ratio (operating expenses ÷ EGI, before reserve)
38.0%
NOI margin, % of EGI
60.8%
NOI per lot
$3,588
Break-even occupancy for NOI of $0
31.5%
Break-even occupancy after year-one debt service
70.8%
Lot rent increase
Lot rent now
$450
Lot rent after a $25 increase
$475
Year-one NOI after the increase
$381,740
NOI added (after bad debt and management)
$22,903
Value at a 7.5% cap rate after the increase
$5,089,861
Value added
$305,368
Value added per $1 of monthly lot rent
$12,215
Value and loan sizing
Year-one NOI
$358,837
Value at a 7.5% cap rate
$4,784,493
Value per lot
$47,845
Value at a 6.5% cap rate
$5,520,569
Value at a 7% cap rate
$5,126,243
Value at a 8% cap rate
$4,485,463
Value at a 8.5% cap rate
$4,221,612
Purchase price
$4,500,000
Price per lot
$45,000
Going-in cap rate on price
8.0%
Loan at 70% LTV (of the lower of price and value)
$3,150,000
Loan at a 1.25 DSCR
$3,688,334
Loan at a 8% debt yield
$4,485,463
Loan (least of the tests; LTV sets it)
$3,150,000
Monthly payment (amortizing)
$20,431
Year-one debt service
$245,170
Year-one DSCR
1.46x
Debt yield (year-one NOI ÷ loan)
11.4%
Closing costs
$90,000
Day-one capital
$60,000
Equity in (price + closing + day-one capital − loan)
$1,500,000
Year-one cash flow after debt
$113,667
Year-one cash-on-cash
7.6%
5-year projection
Year
Lot rent
EGI
NOI
Debt service
Cash flow
DSCR
Cash-on-cash
1
$450
$590,460
$358,837
$245,170
$113,667
1.46x
7.6%
2
$468
$612,513
$373,725
$245,170
$128,554
1.52x
8.6%
3
$487
$635,402
$389,224
$245,170
$144,054
1.59x
9.6%
4
$506
$659,157
$405,359
$245,170
$160,189
1.65x
10.7%
5
$526
$683,813
$422,157
$245,170
$176,987
1.72x
11.8%
Sale and returns
Year 6 NOI (what a buyer underwrites)
$439,645
Sale price at a 8% exit cap
$5,495,558
Selling costs
−$164,867
Loan payoff
−$2,957,085
Net sale proceeds to equity
$2,373,607
Levered IRR
17.5%
Unlevered IRR
10.7%
Equity multiple
2.06x
Total profit before income tax
$1,597,058
Lot rent is lot rent × occupied resident-owned lots × 12; park-owned homes earn home rent × rented homes × 12. Bad debt comes off rent only. Bill-backs are per occupied lot. Occupancy stays where you set it every year. Lot rent grows at the lot rent growth rate; home rent, bill-backs, and other income grow at the other rate; expenses grow at the expense rate; the management fee follows EGI. Break-even occupancy scales resident-owned and rented park-owned lots together. The loan is fixed-rate, sized on year-one NOI, with DSCR sized on the amortizing payment. No income tax, refinance, home sales, infill, or lot expansion is modeled.
What this calculator cannot see
Water, sewer, and private utilities. Many parks run their own wells, septic, lagoons, or old water and sewer lines. A failed system can cost more than years of reserve, so get the lines and systems inspected and the permits checked before you trust the reserve.
Rules on lot rent and bill-backs. Some states and cities set notice periods or limits on lot rent increases in manufactured housing communities, and many regulate how utilities are billed to residents. Read the leases and the local rules before you count on the upside or on more bill-backs.
Park-owned homes. Home rent comes with home repairs, turnover, and depreciation, and the homes are often personal property, not real estate. Lenders and buyers often value them apart from the lots, so ask how your lender counts home rent.
How the cap rate was quoted. NOI here is after the capital reserve and a management fee. Owner-run statements often leave out both and may skip payroll for an owner who does the work, so compare like with like.
Property tax after the sale. Many counties reassess on a sale. Enter the tax you expect after closing, not the seller's bill.
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Example only. Not financial, investment, legal, tax, lending, or appraisal advice.
In most mobile home parks, also called manufactured housing communities, the residents own their homes and rent the lot underneath. The park collects lot rent, may own and rent out some homes of its own, and often bills water, sewer, and trash back to residents. Each of those streams behaves differently, so a park is underwritten lot by lot, not like an apartment building. This calculator starts from the lot count, separates lot rent from park-owned home rent, walks down to NOI, values the park and its value per lot, prices a lot rent increase, shows the occupancy at which it breaks even, sizes the loan the way a lender would, and projects the hold to a levered IRR.
The form loads with an example 100-lot park (82 resident-owned homes, 8 park-owned homes, 10 empty lots) so you can see every line move. Every input is an example number, not a benchmark or a market average. Replace them with the park's rent roll, its leases, the trailing twelve months of operating statements, the utility bills, your expected property tax after the sale, and a lender term sheet. Press Print or save as PDF for a report of the inputs, the P&L, the lot rent scenario, the loan, and the projection.
Mobile home park underwriting starts with the lots. Each lot is either empty, holds a home a resident owns, or holds a home the park owns. A resident-owned home pays lot rent. A park-owned home, often shortened to POH, pays one rent for the home and the lot together. Every lot paying lot rent and every park-owned home rented is gross potential rent. What the occupied lots and rented homes really pay is rental income, and the gap is vacancy.
Bad debt and concessions come off rent. Then add utility bill-backs, the water, sewer, and trash charges billed to each occupied lot by submeter or a formula, plus late fees, application fees, and other income, to get effective gross income, or EGI. Take off property tax, insurance, payroll, the utilities the park pays, repairs to roads and lines, upkeep on each park-owned home, office costs, a management fee, and a capital reserve per lot, and the result is NOI.
Because residents own and maintain most of the homes, a park's expense ratio is often lower than an apartment building's, but it rises fast when the park pays utilities it does not bill back or owns many homes. The calculator shows the expense ratio, the share of rent that comes from park-owned homes, and how much of the utility bill the bill-backs recover, so you can see what is driving NOI before you value it.
Formula
Gross potential rent = (total lots − park-owned homes) × lot rent × 12 + park-owned homes × home rent × 12. Rental income = resident-owned occupied lots × lot rent × 12 + rented park-owned homes × home rent × 12. Vacancy = gross potential − rental income.
Net rental income = rental income − bad debt and concessions. EGI = net rental income + (water and sewer + trash bill-backs) × occupied lots × 12 + other income. NOI = EGI − operating expenses − park-owned home upkeep − management fee − reserve per lot × lots. Value = NOI ÷ cap rate. Value per lot = value ÷ lots. Expense ratio = operating expenses with management ÷ EGI.
Lot rent upside = the NOI and value with lot rent raised on the resident-owned lots, after bad debt and management. Break-even occupancy = the share of lots at which NOI (or NOI minus debt service) is zero, with resident-owned and rented park-owned lots scaled together. LTV loan = max LTV × the lower of price and value. DSCR loan = the amount whose payment equals NOI ÷ minimum DSCR. Debt-yield loan = NOI ÷ minimum debt yield. Loan = the least of the three. Exit value = the NOI of the year after the sale ÷ exit cap rate.
Example
Example
The sample park has 100 lots. 82 lots hold resident-owned homes paying $450 a month, for $442,800 a year. The park owns 8 homes and rents 7 of them at $1,050 a month, for $88,200. Gross potential rent is $597,600, rental income is $531,000, and vacancy is $66,600. Bad debt of 2% ($10,620) leaves net rental income of $520,380. Water and sewer at $45 and trash at $15 per occupied lot per month add $64,080, and other income adds $6,000, for EGI of $590,460. Operating expenses of $194,600 (including $9,600 of upkeep on the park-owned homes), a 5% management fee ($29,523), and a $75-per-lot reserve ($7,500) leave NOI of $358,837. The expense ratio is 38.0%. At a 7.5% cap rate that is a value of about $4,784,493, or about $47,845 a lot, against a $4,500,000 price ($45,000 a lot). A 70% LTV caps the loan at $3,150,000, below the DSCR and debt-yield limits. Debt service is $245,170.08 a year and the DSCR is 1.46. Year-one NOI is $358,837. Value at the cap rate is $4,784,493. Max loan is $3,150,000.
Illustrative example. Every input is a sample so the math is visible, not a real park, a market average, or a deal RE Underwrite Lab did. A $25 lot rent increase on the 82 resident-owned lots adds $22,902.60 of NOI after bad debt and management, about $305,368 of value at the same cap rate. NOI covers operating costs down to 31.5% occupancy and covers the loan too down to 70.8%, against 89% today. With 4% lot rent growth, 3% growth on everything else, a 5-year hold, an 8% exit cap, and 3% selling costs, the example shows a 17.5% levered IRR, a 10.7% unlevered IRR, and a 2.06x equity multiple. Those are outputs of example inputs, not a forecast. The guide to valuing a mobile home park walks the same numbers line by line.
Example
Second example
Illustrative example. A 60-lot park with no park-owned homes rents 54 lots at $500 a month, and residents pay their utilities straight to the utility company. Gross potential rent is 60 × $500 × 12 = $360,000 and rental income is $324,000. With $100,000 of expenses all in, NOI is $224,000, about $2.8 million of value at an 8% cap, or about $46,667 a lot. NOI reaches $0 at about 27.8% occupancy. These figures are made up and are not the sample in the form above.
When this ratio misleads
Value per lot and a cap rate both hide where the NOI comes from. Two parks with the same NOI can carry very different risk: one earns almost all of it from lot rent on homes residents own, the other leans on park-owned home rent that carries repairs, turnover, and depreciation. A seller's NOI often leaves out a management fee, a reserve, and payroll for an owner who does the work, and may count utilities the park pays but never bills back. Check the rent roll, the share of rent from park-owned homes, and the utility bills before you trust the cap rate.
Common pitfalls
Valuing park-owned home rent like lot rent. Home rent carries repairs and turnover, so enter the homes separately and set an upkeep cost per home.
Counting on a lot rent increase without reading the leases. Some states and cities set notice periods or limits on lot rent increases, so check the local rules first.
Skipping the water and sewer system. Private wells, septic, lagoons, and old lines can cost more than years of reserve. Inspect them and set day-one capital to match.
Assuming every utility can be billed back. Many states regulate how utilities are billed to residents, so confirm the method is allowed before you add bill-back income.
Questions
How do you calculate mobile home park income?
Multiply occupied resident-owned lots by lot rent and rented park-owned homes by home rent, take off bad debt, and add utility bill-backs and other income. That is EGI. Subtract operating expenses, park-owned home upkeep, a management fee, and a reserve to get NOI.
How much is a mobile home park worth?
A common starting point is NOI divided by a cap rate from comparable sales, then checked against price per lot. In the example, NOI of $358,837 at a 7.5% cap rate points to about $4.78 million, or about $47,845 a lot. The cap rate is your input, not a market figure.
What is a typical mobile home park expense ratio?
There is no single right number. Parks where residents own their homes and pay their own utilities run leaner than parks that pay water, sewer, and trash or own many homes. Build the expenses from the park's statements and bills, then compare the ratio with similar parks. The example runs 38.0% of EGI.
How much does a lot rent increase add to value?
Each dollar of monthly lot rent on an occupied lot adds about 12 dollars a year of income, less bad debt and management. Divide the added NOI by the cap rate for added value. In the example, $25 a month on 82 lots adds $22,902.60 of NOI and about $305,368 of value at 7.5%.
How do lenders size a mobile home park loan?
Most test the loan against value (LTV), against cash flow (DSCR), and often against a minimum debt yield, then lend the smallest amount that passes every test. Many also look at park-owned home rent separately from lot rent. This calculator runs all three tests and shows which one sets the loan.
Does this replace an appraisal or a lender's underwriting?
No. It is arithmetic on the numbers you type. It does not know the market, the park's condition, its utilities, or local rules. Use an appraiser, a lender, and your own advisors before you buy.
Estimates only. Not financial, legal, tax, or investment advice. RE Underwrite Lab calculators and PDF reports provide educational estimates based on the numbers you enter. Actual purchase costs, rents, expenses, financing terms, taxes, insurance, vacancy, rehab costs, refinance eligibility, and returns vary by property, market, lender, and local law (including short-term rental rules). We do not guarantee any outcome, profit, cash flow, or appraisal. Some content and tools may be generated or assisted by artificial intelligence and can contain errors. Always verify assumptions with licensed professionals and your own due diligence before making decisions.
Mobile Home Park Calculator: Value & NOI | RE Underwrite Lab