Most owners we talk to have a number in their head for what their community is worth. Sometimes it came from a neighbor who sold. Sometimes it's what they paid plus what feels fair for the years since. Occasionally it's a figure a broker threw out over the phone.

Buyers don't work from any of that. They work from three numbers, and once you know which three, you can run a rough version of the math yourself.

The short version

A park's value is its net operating income divided by a cap rate. NOI is what's left after operating expenses but before your mortgage and before depreciation. The cap rate is what the market is paying for that income stream today.

That's the whole formula. Everything that follows is about the inputs.

Number one: lot rent, and the gap to market

Lot rent is the top of the waterfall. Every dollar of monthly lot rent flows to the bottom line more directly than almost any other revenue in real estate, because the tenant owns the home and handles its upkeep.

What matters to a buyer isn't just what you charge. It's the gap between what you charge and what the market will bear. A community at $340 a month in a submarket where comparable parks get $475 is carrying $135 per lot per month of unrealized income. On 80 occupied lots that's $129,600 a year of NOI a buyer can underwrite as achievable — and they will underwrite it, then pay you for a fraction of it while keeping the rest as their upside.

This is the single most common reason an owner is disappointed by an offer. They see a well-run park with happy long-term tenants. The buyer sees rents that haven't moved in six years and prices the property on today's income, not tomorrow's.

If you're within a year or two of selling, closing some of that gap yourself is usually worth more than any physical improvement you could make.

Number two: occupancy, and the difference between vacant and unusable

Occupancy gets quoted as one percentage, but buyers break it into pieces:

Occupied lots with tenant-owned homes paying lot rent. This is the income that gets valued at the market cap rate.

Vacant lots with infrastructure — pad, utilities, ready for a home. These have real value, but it's speculative value. A buyer discounts them heavily because filling a lot costs money and takes time.

Vacant lots without infrastructure or with failing utilities. These are close to worthless in an underwriting model, and can be a liability if the county has opinions about them.

Park-owned homes. Income from these is treated differently. It's rental income on a depreciating asset with maintenance exposure, so buyers apply a higher cap rate, sometimes valuing park-owned homes closer to their wholesale value than capitalizing the rent at all.

A community that's "95% occupied" with 40% park-owned homes underwrites very differently from one that's 95% occupied with tenant-owned homes throughout.

Number three: the expense ratio

Expense ratio is operating expenses divided by gross income. In manufactured housing it's typically lower than other asset classes, which is much of the appeal — the tenant owns the structure, so you're maintaining roads, utilities, and common areas rather than 80 roofs.

Two things distort this number when an owner-operator sells.

First, uncaptured owner labor. If you or a family member handles collections, maintenance calls, and showings without taking a salary, your P&L looks better than the property's true economics. A buyer will add back a management expense — often 4–6% of gross — whether or not you ever paid one.

Second, deferred maintenance masquerading as efficiency. A water system that hasn't been touched in fifteen years produces a beautiful expense ratio right up until it doesn't. Buyers who know the asset class will look at the age of the infrastructure and reserve accordingly.

What the cap rate does to all of it

The cap rate is the one input you don't control. It moves with interest rates, lender appetite, and how many buyers are competing for communities in your market.

Two things are worth understanding. A small change in cap rate is a large change in price — on $500,000 of NOI, moving from a 6.0% to a 6.5% cap rate is a difference of roughly $640,000. And cap rates vary by market, size, and quality: a 200-lot community on public utilities in a growing metro trades at a different rate than a 40-lot park on well and septic two hours out.

This is also why "I'll wait until rates come down" isn't the free option it sounds like. Rates may move either way, and while you wait, your infrastructure ages and your deferred maintenance compounds.

Running it yourself

Take your gross annual income. Subtract real operating expenses, including a market management fee even if you don't pay one, and including a realistic reserve. That's NOI. Divide by a cap rate in the range communities like yours are trading at in your market.

That gets you within shouting distance. It won't capture the things that move a real offer — utility infrastructure, the mix of park-owned homes, zoning and expansion potential, the quality of your rent roll, whether your market has buyers actively looking right now.

Where we come in

We provide a complimentary Broker Opinion of Value for community owners. It's a written estimate of value based on recent comparable sales, your actual rent roll and expenses, and current buyer demand in your market. No cost, no listing agreement, and no obligation to do anything with it.

Owners use it for refinancing, estate planning, partnership buyouts, and simply knowing where they stand. Some of them sell. Most don't, at least not that year.

If you'd like one for your community, reach out. We've closed more than $2.5 billion in manufactured housing and RV community transactions across 30,000+ sites, and we keep a network of 15,000+ investors who buy in this space specifically.

CRI Brokerage · cribrokerage.com · DRE #01807613