Somebody told me the average lot rent inside a Macomb County park is sitting around $340 a month and I cannot figure out if that is low or catastrophic

$340 in Macomb County reads as below market but not dramatically so for the Midwest at that vintage. The national median for manufactured housing lot rent has been running somewhere in the $500 to $600 range depending on the source and the year you are looking at, but that number is dragged up by coastal and Sun Belt parks. Great Lakes markets have historically sat lower, and parks with older infrastructure and no utility separation tend to anchor at the bottom of whatever that local range is. So $340 is not evidence of a catastrophe. It is evidence of an operator who has not moved rents aggressively, which is a different thing.

The assumption doing the most work in your $60 bump calculation is that the park is already stabilized, meaning occupancy is high enough that the operator has pricing power. If physical occupancy is in the low eighties or below, pushing rent before you fill lots is the wrong sequence. You compress margins on existing tenants and you do not add the NOI that actually moves valuation. The order matters: fill first, then raise.

The gap you are describing between $340 lot rent and $1,200 to $1,500 single-family rent in the same county is real and it is structural, but it does not translate into a simple arbitrage. Lot rent does not compete directly with single-family rent because the tenant set, the financing options, and the product are different. The relevant comparison is what other parks in the immediate sub-market are charging. If comparable parks within a reasonable radius are at $420 to $460, you have room. If they are also at $340, the market has priced it there for a reason, often infrastructure age, utility configuration, or local regulatory sensitivity.

The regulatory piece is the risk you did not name. Michigan has tenant protection provisions around rent increases in manufactured housing communities, and municipal pressure in metro Detroit counties around displacement has been active. Confirm current statutory limits and notice requirements with a Michigan real estate attorney before modeling aggressive rent escalation into your underwriting.

What is the utility structure on the parcels you pulled? Master-metered or individually metered shifts the expense ratio and the rent-raise ceiling significantly.

Macomb Township specifically has fought rent increase ordinances harder than the surrounding townships, and that detail is not in any pro forma I have ever seen handed to a capital partner.

$340 is below the Midwest average for stabilized parks, which tends to run $380 to $450 depending on infrastructure age and what utilities the operator carries, so the number is not catastrophic but it does signal a landlord who either never pushed or hit resistance and stopped. The gap you are describing against single family rents in the same county is actually the clearest tell: lot rent at roughly 25 cents on the dollar relative to a comparable housing alternative is what value-add buyers look for, because the ceiling exists even if the path to it is slow and politically bumpy. The $60 bump math is real but undersells the compounding effect, since 80 pads times $60 is $57,600 annually and at a 7 cap that prints roughly $820,000 in value creation before you touch anything physical. What I would want to know is whether the park is on public water and sewer or on private systems, because that single variable determines whether a municipality has any leverage over you during a rent increase cycle, and it changes the political exposure considerably.

Midwest parks I have seen quoted are running $380 to $450 in comparable counties right now, so $340 is trailing.

What year did that rent roll show the last increase, because that tells you more than the number itself.

$340 is not catastrophic but it is definitely a 2019 problem that compounded. The parks I have seen quoted in the Ohio-Michigan corridor through passive deals I looked at last year were running $380 to $420 for stabilized product, and the ones still at $340 had usually been under the same family ownership for fifteen-plus years where nobody wanted the fight. The gap you are describing between lot rent and single-family rent in that county is actually the tell. When lot rent is sitting at less than 25 percent of comparable SFR rent in the same zip, that is usually a management problem or a political fear problem, not a market problem. The market would bear more if someone would just push.

The $60 bump math is where it gets real though. Eighty pads times $60 is $57,600 a year in additional NOI, and at a 7 cap that is roughly $820k in value you are leaving on the table by not moving the rents. What nobody says out loud until it bites them is that in Michigan specifically, if the park has not been increasing annually it may have created a de facto baseline that tenants will cite if you try to jump it in one move, and some of those leases in older Macomb parks are month-to-month in writing but have an implied renewal expectation that gets litigated weird. I watched a deal in Genesee County stall for eight months over exactly that. So the question I would actually be asking is whether those leases have any escalation language at all, because if they do not, the $340 is not just a revenue problem, it is a documentation problem.

$340 sits in the range where the rent itself is not the problem, the lease structure is. Many Midwest parks at that number are running month-to-month tenancies with no escalator clause, which means every $60 bump requires a fresh notice, a fresh political fight, and a fresh calculation about whether the tenant moves the home or absorbs the increase. If the rent rolls you pulled show month-to-month across most of the pads, the distress is in the documentation, not just the rate.

The risk nobody has named is the home-to-land ratio inside that gap. When lot rent is $340 and a used doublewide in that submarket costs $40,000 to move and reset, tenants are effectively locked in, which sounds like operator pricing power until a local council notices the same thing and passes a just-cause eviction ordinance or a rent stabilization cap. Macomb County is not immune to that dynamic, and a park bought on the thesis of compressing that gap fast becomes a different asset if the regulatory ceiling drops below the business plan before year three.

What do the leases actually say about notice periods and annual increase caps?