MHP Property Tax Underwriting: Two Rolls, Not One

Published November 12, 2026

In a licensed Michigan mobile home park, an occupied home pays $3 a month. Not $3 on top of property tax — $3 instead of it. Michigan Treasury's Bulletin 14 of 2016 describes a $3.00 per month specific tax collected for every occupied trailer coach under MCL 125.1041, and states plainly that the specific tax exempts occupied trailer coaches from property taxes. The operator collects it and remits it to the city or township treasurer.

Drive the same park to New York and the arithmetic inverts. Real Property Tax Law 102(12)(g) provides that the value of a trailer or mobile home is included in the assessment of the land on which it is located, so the park owner is generally assessed on homes the residents own. Same lot count, same lot rent, same trailing operating statement — and a tax base that differs by millions of dollars of assessed value.

Why Mobile Home Park Property Tax Underwriting Starts With the Roll, Not the Rate

Most expense diligence treats the tax line as a rate problem: find the mill rate, apply it to the purchase price, move on. That is roughly the approach a standard pass takes on the expense lines people normalize fastest, and on a tenant-owned park in a reassess-on-transfer state it is approximately right.

It breaks on a Mobile Home Park (MHP) because the purchase price is not one asset. It is land, infrastructure, and park improvements — real property — plus a pool of Park-Owned Homes (POH) that in most states are titled and taxed as personal property, plus, in a handful of states, the value of Tenant-Owned Homes (TOH) the buyer never acquires at all. Three categories, and the jurisdiction decides which roll each one lands on.

So mobile home park property tax underwriting has two inputs ahead of the rate: the split of the contract price between realty and non-realty, and the state's rule on who is assessed for which home. Both are knowable before a contract goes hard. Neither appears in a park underwriting pass that begins at the operating statement.

What Sits on the Real Property Roll Versus the Personal Property Roll

The dividing line is generally how the home is titled, not how it is used.

• Personal property by default. Arizona places units titled through its motor vehicle agency on the personal property roll per A.R.S. 42-15152(B). Texas treats a manufactured home as personal property unless the owner perfects a real property election, and Occupations Code 1201.2055 permits that election only where the home is attached to land the owner owns or holds under a long-term lease.
• A land-lease affixture does not move the roll. Arizona's Department of Revenue manual describes a home affixed in a land-lease community under A.R.S. 33-1501(I) as treated as real property primarily for financing purposes, while remaining on the personal property roll per A.R.S. 42-15203(K). The lender's view and the assessor's view can diverge on the same home.
• The land is valued as though vacant. The same manual describes park land valued as though vacant and unimproved and available for use as a land-lease community, with community improvements such as clubhouses, streets, and pools valued on the cost approach.
• Resident improvements follow the improvement owner. Michigan Treasury's bulletin describes decks, sheds, carports, patios, and non-chassis additions as assessable to the owner of the improvement under MCL 211.2(1)(c), even on leased land.

The practical consequence is that a park's owned-home pool is a moving tax base. Selling homes down converts personal property the park is assessed on into homes titled to residents — a point that compounds the carried-value and title mechanics of the sell-down. The homes are a separate stream for tax purposes exactly as they are a separate stream for expense and capital purposes.

The Same Park, Three Regimes, Three Tax Bases

Example — illustrative. A 120-lot park, 104 lots occupied, lot rent of $410 per month, 26 of the occupied lots carrying park-owned homes rented at roughly $340 per month above lot rent. Lot income of approximately $512,000, home rent near $106,000, other income around $16,000 — Effective Gross Income of roughly $634,000. Operating expenses near 45% of Effective Gross Income on a park with this much owned inventory, so about $285,000. Year-one Net Operating Income (NOI) of roughly $349,000, which at a 6.50% cap is approximately $5.37M.

Assume the closing allocates about $440,000 of that price to the 26 owned homes, leaving roughly $4.93M of real property, and that the 78 resident-owned homes would carry a cost-approach value near $2.18M. Applying an illustrative 1.8% effective rate to whatever the jurisdiction puts in the park's base:

Rates, allocations, and cost-approach values vary enough by jurisdiction that the dollar columns above are illustrative rather than indicative of any market. The shape is the point: the common model happens to land close to the split-roll answer, and misses both outliers.

Proceeds are sized at a 1.25x coverage floor against a debt constant of approximately 8.0% — a coupon near 7.05% on a 30-year monthly amortization, or roughly 200 bps over the 10-year Treasury, which stood at 5.05% on October 28, 2026 per the Federal Reserve's H.15 series as published by the Federal Reserve Bank of St. Louis. The spread between the first and last rows is roughly $725,000 of value and about $470,000 of refinance proceeds on a park with identical lots, identical rent, and an identical rent roll.

The Assessment Method Decides Whether the Purchase Price Is Evidence Against You

Two mechanics inside the assessment itself move the number further.

The first is double counting, or its absence. New York's Opinions of Counsel describe an assessor adding the cost-approach value of residents' homes to the income-approach value of the park, and explain that this is not double taxation where residents own their homes and rent only the pads, because the income approach then measures the land alone. The same materials note that where a park owner also rents the homes, adding their value would double count them. On a park with 26 owned homes inside the income stream, that distinction is the difference between a defensible assessment and an appealable one.

The second is classification. Arizona's manual describes long-term spaces of 30 days or more as Class Four at a 0.10 assessment ratio, short-term spaces of 29 days or fewer as Class One commercial, whose ratio per A.R.S. 42-15001 is 16% for tax year 2025, 15.5% for 2026, and 15% thereafter, and mixed parks as requiring a weighted ratio. A park where part of the income is transient therefore carries a materially higher ratio on that share — the tax-side echo of treating recreational vehicle sites as their own cash flow.

Where This Analysis Breaks

The framing above overstates how often the split matters. On a tenant-owned, direct-bill park in a reassess-on-transfer state, reassessing to the purchase price and applying the mill rate lands within a few thousand dollars of the right answer, and a buyer who builds a four-regime tax model on every deal is spending diligence hours to refine a rounding error. The median park is not New York and not Michigan.

The New York case is also narrower than the table suggests. Assessing the park on resident-owned homes raises the base, but it does not follow that the cost is permanently the buyer's: the state's own materials note that park owners have been able to pass increased tax through to residents in rent, and residents may qualify for exemptions on their homes that reduce the assessment in the first place. What the pass-through runs into is New York's rent-justification regime for manufactured home parks, which limits how fast pad rent can move — so the recovery is slow rather than absent, and the current limits are worth reading against the statute rather than a summary. That is the same timing problem that shows up wherever a regulated market caps the rent assumption.

The allocation itself is the weakest input here, and it cuts both ways. The split between realty and non-realty is negotiated at closing, and an aggressive allocation to homes that shrinks the real property base also shrinks depreciable real property basis and may invite an assessor's challenge. A number chosen to win the tax argument can lose the depreciation one, which argues for an allocation supported by an appraisal rather than one reverse-engineered from a target tax bill.

Finally, the effective rate used above papers over enormous variation. A single 1.8% stands in for mill rates, equalization ratios, assessment ratios, caps on annual growth, and local levies that differ across adjacent townships. The usable version of this analysis is a call to the county assessor, not a modeled rate.

The Underwriting Takeaway

Three tests travel from this. Split the contract price into real property and non-realty before applying any rate, because the roll each piece lands on — and sometimes whether it is taxed at all — is a state-law question the price does not answer. Count the owned homes and the resident-owned homes separately, since in a minority of states the park is assessed on homes it will never own, and in at least one state the occupied homes are exempt from ad valorem tax entirely. And run the tax line through both the cap rate and coverage-sized proceeds, because a $47,000 swing in a single expense line is roughly $725,000 of value on a park this size.

The mill rate is the last step, not the first. The roll comes first, and it is not in the operating statement — it is in the statute and on the diligence list.

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This analysis reflects current market interpretations as of the publication date and may evolve as new data becomes available. Figures cited are drawn from public sources including the Michigan Department of Treasury's Bulletin 14 of 2016 and the Michigan Compiled Laws, New York's Real Property Tax Law and the New York State Department of Taxation and Finance's Opinions of Counsel, the Arizona Department of Revenue's Manufactured Housing Manual and the Arizona Revised Statutes, the Texas Occupations Code, and the Federal Reserve's H.15 selected interest rates series as published by the Federal Reserve Bank of St. Louis, and are subject to revision. Nothing in this post is investment advice; readers should conduct their own diligence and consult qualified professionals before making investment decisions.