How to Read a Mobile Home Park Profit and Loss Statement

By Harry Shurek, EA | The MHP Accountant®

Your accountant handed you a P&L. It shows a net loss of $47,000 even though you deposited $18,000 last month. A broker is asking for your financials before making an offer. Your lender wants a “normalized” P&L within 10 days. And you’re staring at a document you’re not sure you can trust.

This is the situation mobile home park owners face every single quarter — not because they aren’t smart, but because most P&Ls handed to MHP operators were built for apartment complexes, retail strips, or generic rental portfolios. The structure is wrong. The line items are wrong. And the story the P&L tells is wrong.

Understanding your park’s profit and loss statement is not optional. It’s how you catch errors before a lender does. It’s how you maximize NOI before a sale. It’s how you know whether your operations are genuinely profitable or just cash-flow-positive by accident.

This walkthrough covers every section of an MHP-specific P&L from top to bottom, line by line, the way The MHP Accountant® structures it for clients.

The MHP P&L Structure at a Glance

A properly prepared mobile home park profit and loss statement follows this waterfall:

1. Gross Scheduled Income (GSI)
2. Minus Vacancy & Credit Loss
3. Equals Effective Gross Income (EGI)
4. Minus Operating Expenses
5. Equals Net Operating Income (NOI)
6. Minus Debt Service
7. Minus Depreciation & Amortization
8. Equals Net Income (or Loss)

Each step matters. Each line has an MHP-specific definition. Let’s go through them.

Section 1: Gross Scheduled Income

Gross Scheduled Income is the total revenue your park would collect if every lot and home were occupied and paying on time at current rates. It’s the theoretical ceiling — before vacancy, before late payments, before anything goes wrong.

For MHP operators, GSI must be broken into separate line items. Bundling everything into one “rent income” account is the number-one bookkeeping error The MHP Accountant® sees in parks we take over. Here’s how it should look:

• Lot Rent Income: Revenue from tenant-owned homes (TOH) paying for their land lease. This is your most stable, highest-quality income stream.
• POH Rent Income: Revenue from park-owned homes (POH) rented to residents. This income is higher per unit but carries more operational burden and maintenance exposure.
• Utility Income / RUBS: If your park bills back utilities — either through submetering or a Ratio Utility Billing System (RUBS) — this is tracked separately. Never net utility income against utility expense.
• Late Fee Income: Fees charged for late rent payments. Lenders typically exclude or heavily discount this from NOI underwriting.
• Other Income: Storage fees, laundry income, application fees. Keep this separate from core rent income.

Why does the separation matter? Because a buyer acquiring your park wants to know how much of your revenue is sustainable lot rent and how much is variable, management-intensive POH income. Combining them hides risk.

Section 2: Vacancy and Credit Loss

Vacancy & Credit Loss is subtracted from GSI to arrive at Effective Gross Income. It includes both physical vacancy (empty lots or homes) and economic vacancy (occupied units that aren’t paying).

On a well-run MHP, lot rent vacancy is typically low — often lower than multifamily — because TOH residents bear moving costs that discourage turnover. POH vacancy is higher and more volatile. Your P&L should separate these two vacancy figures so the quality of each income stream is transparent.

Section 3: Effective Gross Income

EGI is what you actually collected (or should have collected, on an accrual basis). It’s the starting point for calculating NOI. Everything above this line is about revenue; everything below is about how efficiently you operate.

Section 4: Operating Expenses — The Most Critical Section

This is where improperly prepared P&Ls cause the most damage. MHP operating expenses must be categorized with surgical precision.

Site / Lot Maintenance

Costs related to the land itself — roads, drainage, common areas, signage. This is the expense category unique to land-lease communities. It has nothing to do with homes.

POH Repairs and Maintenance

Costs associated with maintaining park-owned homes. This must be separated from site maintenance because it relates to a different asset class and has different tax treatment. Repairs on POHs may be fully deductible; improvements must be capitalized.

Utilities

What the park pays for water, sewer, electric for common areas. If you’re on a master meter and billing back via RUBS, the gross utility cost goes here. The RUBS income goes on the income side. Do not net these.

Management Fees

If you use a third-party property manager, the fee (typically 8–12% of EGI) appears here. If you self-manage, this line must still appear — at market rate — as an add-back for normalization purposes. Lenders and buyers normalize self-managed parks to include a management fee, so if it’s missing from your P&L, they will subtract it from your NOI during due diligence.

Insurance

Park liability and property insurance. If you carry separate POH policies, those belong in the POH expense category, not the general insurance line.

Property Taxes

Real estate taxes on the land and any improvements. Note that POHs titled as personal property — not affixed to the land — may be assessed differently. Your books should reflect this distinction.

Administrative & Professional Fees

Accounting, legal, software subscriptions (rent management platforms), office supplies. These are legitimate operating expenses, but watch for owners who run personal expenses through this category.

Section 5: Net Operating Income (NOI)

NOI = EGI minus all operating expenses. It does not include depreciation, debt service, income taxes, or owner compensation. It is the single most important number in your P&L for valuation purposes.

Your park’s market value is typically calculated as NOI ÷ cap rate. A $10,000 error in NOI — caused by a misclassified expense or missing management fee normalization — translates directly into a lower sale price at a 6–8% cap rate market.

Section 6: Below-the-Line Items

Below NOI, you find items that affect net income but not NOI. These are critical for your personal tax return but should not be confused with operating performance.

Debt Service (Interest Only)

Mortgage interest is deductible. Principal paydown is not. Only the interest portion of your loan payment belongs on the P&L.

Depreciation and Amortization

This is where the P&L gets interesting for tax purposes. Depreciation under MACRS reduces your taxable net income without affecting cash flow. A park with strong NOI can show a paper loss on the tax return after depreciation — which is a feature, not a bug, for tax-savvy owners.

POHs depreciate over 27.5 years as residential rental property. Land improvements (roads, utilities) may qualify for 15-year MACRS with 100% bonus depreciation when a cost segregation study is performed. See our post on depreciation recapture at sale to understand the trade-off.

How Lenders and Buyers Normalize Your P&L

When a broker or lender underwrites your park, they perform NOI normalization — adjusting your reported NOI to reflect stabilized, sustainable performance. Common normalizations include:

• Adding a management fee if you’re self-managed
• Removing one-time expenses (a tree removal, a septic repair)
• Adjusting vacancy to market-rate if you have unusual occupancy
• Removing non-arms-length expenses

Clean, MHP-specific books make normalization faster and give buyers less room to argue your NOI down. Messy books give buyers leverage. See our detailed post on NOI normalization for MHP valuations.

Red Flags That Indicate a P&L Was Prepared Without MHP Expertise

Not every CPA understands mobile home park accounting. Here are the warning signs:

• Lot rent and POH rent combined into one line
• Utility income netted against utility expense (or buried in “other income”)
• No management fee on a self-managed park
• Capital expenditures buried in repairs and maintenance
• Depreciation mixed into operating expenses instead of shown separately
• Security deposits recorded as income
• No separation between site maintenance and POH maintenance

Any of these signals that your books need reconstruction before a sale, refinance, or audit. The MHP Accountant® specializes in exactly this kind of remediation work.

Frequently Asked Questions

External Resource: For official IRS guidance on rental income reporting, see IRS.gov — Rental Income and Expenses.

Disclaimer: This post is for educational purposes only and does not constitute tax, legal, or financial advice. Every MHP owner’s situation is unique. Consult a qualified tax professional before making decisions based on this content. The MHP Accountant® is available for individual consultations at the contact information above.