Almost every property accounting system in existence models the world the same way: a unit, a lease, a tenant, a rent roll. That model works for apartments, offices and retail because in all three the landlord owns the thing being occupied.

A manufactured housing community does not work that way. It is two overlapping registers — homesites you lease out, and homes you may or may not own — and the second register behaves nothing like the first. It has book value, a depreciation schedule, inventory, sales revenue, cost of goods sold, and eventually a disposal. It is a different business, sharing a balance sheet with a land business.

This guide covers how the two registers actually work, the four different accounting rulebooks that apply to your revenue, why a park-owned home is three different assets depending on what you plan to do with it, the depreciation and seller-financing traps that catch operators, and what any of it means for the system you run it all in.

Key takeaways

• An MH community runs two registers, not one. Sites produce lease revenue; homes produce rental revenue, sales revenue, interest income and depreciation.
• The two largest public MH REITs disagree about whether to report them separately. One splits into two segments; the other told the SEC in May 2026 it has one. Both are compliant.
• Where the split is reported, the margins are not close: roughly 51% NOI margin on the site register against 11% on the home register. Blending them hides that.
• Four revenue streams, four rulebooks. Lot rent under ASC 842. Utility recovery usually combined with it. Home sales under ASC 606 — unless the home was a rental, in which case ASC 610-20 and a gain, not revenue.
• A park-owned home is three different assets depending on intent — fixed asset, inventory, or note receivable — and the classification drives the tax result.
• 100% bonus depreciation is back for property placed in service after 19 January 2025 — but only for assets with a recovery period of 20 years or less. Your 15-year site improvements qualify. Your 27.5-year homes do not.
• If you regularly seller-finance homes you are a dealer, and the installment method is closed to you: full gain in the year of sale, cash collected over years.
• Your lender already requires the two-register split. Fannie Mae's underwriting excludes home rent from net cash flow while including site rent from the same cheque.

The two registers

Start with a balance sheet rather than a theory. Here is where homes actually sit in the audited accounts of the largest rental-home operator in the sector, at 31 December 2025:

Source: UMH Properties FY2025 Form 10-K, filed 25 February 2026.

Homes appear in three separate places: as a depreciable fixed asset, as inventory, and as a receivable. Rental homes alone are roughly 34% of gross investment property. None of that has an equivalent in an apartment balance sheet, and none of it fits in a rent roll.

That is the whole problem in one table. A platform that models "units with leases" can represent the site register perfectly and the home register not at all. Operators then do one of two things: force the homes into the units table and lose the asset accounting entirely, or run a parallel spreadsheet and lose the single source of truth. Both are common, and both eventually cost more than the software did.

What the public REITs prove — and where they disagree

This is not a theoretical debate, and it is settled in public filings.

Equity LifeStyle Properties reports two segments: Property Operations, and Home Sales and Rentals Operations. For FY2025:

Source: ELS FY2025 Form 10-K segment note, filed 18 February 2026. NOI margins computed. Property Operations includes membership, RV and marina revenue, so it is not a pure MH-site ratio.

A 51% margin business and an 11% margin business, inside one company. Look also at what that split does to a single GAAP caption: consolidated rental income is $1,282,532K, but the Property Operations segment reports rental income of $1,268,243K. The $14,289K difference is home rental income, living in the other segment. One revenue line, deliberately cut in two.

UMH Properties reports one segment. When the SEC staff asked it in April 2026 to provide full segment disclosure under ASU 2023-07, the company responded in May 2026 that it "has one single reportable segment based on its method of internal reporting," and that the chief operating decision maker "is provided with the consolidated financial statements to assess segment performance" (SEC staff comment letter and company response, April–May 2026).

This is a company with roughly 11,000 rental homes and $35 million of annual home sales, reporting as one segment. And it is entirely compliant — segment reporting follows how management actually runs the business, not what the assets look like.

The read-across for a private operator is the useful part. Nothing in GAAP forces you to separate the site register from the home register. Which means if you want to know whether your rental-home programme is earning its capital, you have to build that visibility deliberately. Nobody will require it of you until a buyer or a lender asks, and by then the answer is historical.

Four revenue streams, four rulebooks

The second thing conventional property accounting gets wrong is treating all community income as rent.

1. Lot rent — ASC 842, and there is no way out of it

Lot rent is an operating lease from the lessor side. Two points operators get wrong:

There is no short-term lease exemption for lessors. The exemption in ASC 842-20-25-2 is a lessee election. As PwC puts it, the leases guide "does not address what a lessor should do with short-term leases" because there is no corresponding lessor guidance. A month-to-month lot lease is still a lease under ASC 842, with the lessor disclosure requirements attached.

Land can never be anything but an operating lease. Land has an infinite economic life, so the economic-life classification test cannot be applied to it at all.

Both public MH REITs confirm the treatment. ELS: "Rental income is accounted for in accordance with Accounting Standard Codification (ASC) 842, Leases, and is recognized over the term of the respective lease." UMH: "Rental and related income is generated primarily from lease agreements for our sites and homes. The lease component of these agreements is accounted for under ASC 842."

There is a wrinkle worth knowing. ASC 842-10-55-23 says a lease stops being enforceable when both parties can terminate without permission and without more than an insignificant penalty. In manufactured housing, most state statutes give the resident a short exit and restrict the operator's — so a "month-to-month" lot lease may have a longer enforceable term than its name suggests. The general mechanics are in our guide to ASC 842 compliance, setup and disclosures.

2. Utility recovery — usually combined, not separate

Under the lessor practical expedient at ASC 842-10-15-42A, a non-lease component can be combined with the lease component when the timing and pattern of transfer are the same and the lease would be an operating lease. ELS applies exactly this: "We do not separate expenses reimbursed by our customers ('utility recoveries') from the associated rental revenue as we meet the practical expedient criteria."

That is a reporting simplification, not an operational one. You still have to be able to prove what you paid and what you recovered — most states cap utility billing at cost recovery. That is covered in our guide to utility billing in manufactured housing communities.

3. Home sales — ASC 606, or ASC 610-20, depending on why you owned the home

This is the distinction almost nobody gets right, and it changes the income statement.

• A home held for sale — inventory — sells under ASC 606, producing revenue and cost of goods sold. UMH's stated policy: "Revenue from sales of manufactured homes is recognized in accordance with the core principle of ASC 606, at the time of closing when control of the home transfers to the customer."
• A rental home sold off is a nonfinancial asset that is not an output of ordinary activities. It derecognises under ASC 610-20, producing a gain or loss — not revenue, not COGS.

The same physical transaction — a resident buys the home they live in — hits your income statement in two completely different places depending on which register the home was sitting in. Get the classification wrong and your revenue, your margin and your gain are all misstated at once.

For scale, here is what the home register actually contributes at the sector's heaviest home-sales operator:

Source: UMH Properties FY2025 Form 10-K, consolidated statements of income. Margins computed. Note the company's earnings release quotes different, non-GAAP figures — use the audited statements.

4. Interest income — below the line, and easy to lose

If you seller-finance, the interest is not rent and does not belong in property revenue. UMH reports $8.7 million of it in other income, below the operating lines. In a community running a conversion programme, this is a real and growing revenue stream that most chart-of-accounts structures have nowhere to put.

A park-owned home is three different assets

The single most useful mental model in MH accounting: the home's classification follows your intent, and the intent drives the tax.

Federal tax treatment of the rental case is explicit. IRS Publication 527 places in the 27.5-year residential rental class "any real property that is a rental building or structure (including a mobile home)" where 80% or more of gross rental income comes from dwelling units (IRS Publication 527).

For book purposes the REITs use shorter lives — UMH depreciates sites and buildings over 15 to 27.5 years; ELS uses 10 to 25 years for manufactured homes and 10 to 30 for land and building improvements. Book life and tax life are not the same conversation.

Inventory carries its own policy requirement. UMH: "Inventory of manufactured homes is valued at the lower of cost or net realizable value and is determined by the specific identification method." Specific identification, not average cost — because every home is a distinct asset with a serial number, a condition and a history.

The full mechanics — journal entries, useful-life tables, capitalisation policy and disposal — are in our guide to park-owned home accounting.

The depreciation trap: bonus depreciation stops at 20 years

This one is worth money and is frequently missed.

100% bonus depreciation was restored for qualified property acquired and placed in service after 19 January 2025. But §168(k)(2)(A)(i)(I) limits qualified property to assets with a recovery period of 20 years or less.

So, in a manufactured housing community:

The 15-year classification comes from Rev. Proc. 87-56 asset class 00.3, quoted in Rev. Rul. 2001-60, which covers "improvements directly to or added to land" including "sidewalks, roads… drainage facilities, sewers… fences, landscaping, shrubbery" (IRS Rev. Rul. 2001-60). Section 179 is also available, at a $2.5 million limit with a $4 million phase-out threshold for tax years beginning in 2025 (IRS Publication 946).

A genuine controversy you should know about before a cost segregation study lands on your desk. Cost segregation vendors routinely place park-owned homes in the 5-year bucket as personal property. One published MH community study allocated 47% of depreciable basis to 5-year property described as "park-owned movable homes, utility hookups, signage, furnishings." That is a defensible position in principle — the IRS's own Cost Segregation Audit Techniques Guide states there is "no general bright-line test" for separating §1245 from §1250 property and that each situation is "factually intensive" (IRS ATG, Chapter 2). But it sits in obvious tension with Publication 527's explicit "including a mobile home" language, and we could not find any IRS ruling or Tax Court decision squarely holding that an unaffixed park-owned rental home is 5-year property. Take the study, but take advice with it.

Seller financing: the trap that costs the most

If you finance home sales in house — and most conversion programmes eventually do — this section matters more than anything else in the article.

The installment method is closed to dealers. IRC §453(b)(2) excludes any "dealer disposition" from installment sale treatment, and §453(l)(1)(A) defines that as "any disposition of personal property by a person who regularly sells or otherwise disposes of personal property of the same type on the installment plan."

A community that routinely sells homes to residents on payment plans is squarely inside that definition. The consequence is stark: you recognise the entire gain in the year of sale, while collecting the cash over five or ten years. Tax due now, money later. An operator who models a conversion programme on installment-method cash flows has the timing badly wrong.

Whether you are a dealer or an investor is a facts-and-circumstances test — purpose in acquiring, purpose in holding, extent of improvements, frequency and continuity of sales, extent of advertising, and more, with no single factor controlling. No IRS ruling or Tax Court decision applies that test specifically to an MH community selling homes to its own residents, so the analysis is analogical. That is exactly why it needs to be decided deliberately, in advance, with your adviser.

Three consumer-lending tripwires sit alongside it. Regulation Z defines a dwelling to include a "mobile home, and trailer," so these loans are covered credit:

• Five dwelling-secured extensions a year makes you a creditor under §1026.2(a)(17)(v).
• The seller-financer exclusions are narrow. The three-property exclusion at §1026.36(a)(4) requires fully amortising loans with no balloon, a good-faith ability-to-repay determination and rate constraints. The one-property exclusion at §1026.36(a)(5) is available only to "a natural person, estate, or trust" — an LLC-owned community cannot use it.
• The HOEPA small-loan trigger is easy to hit. For 2026 the thresholds are a $27,592 total loan amount and $1,380 in points and fees. On a $35,000 home note, $1,380 of fees makes it a high-cost mortgage with everything that follows.

There is no de minimis exemption under the SAFE Act, either. Full detail on structuring, licensing and the state overlay is in our guide to rent-to-own in manufactured housing and chattel loans for community operators.

Property tax: a liability that is often neither yours nor theirs

Manufactured home property tax splits along the same two registers, and in some states you are a collection agent for a tax you do not owe.

• California values them as genuinely separate things. Per the Board of Equalization, "the assessed value of a manufactured home on leased or rental land is not to include any value attributable to the particular site where the home is located." A home on rented land stays a manufactured home for tax purposes and is not converted to real property unless placed on an approved permanent foundation (California BOE).
• Florida issues an MH decal where the resident does not own the land, and treats homes without a current sticker as tangible personal property (Florida DOR GT-800047).
• Michigan makes the operator the collector: a $3.00 per month specific tax for every occupied trailer coach "must be collected by the park operator… and paid to the city or township treasurer," and it exempts the home from ad valorem property tax (Michigan Treasury Bulletin 14 of 2016).

You pay real property tax on the land and improvements. The resident pays home-level tax on a tenant-owned home; you pay it on a park-owned one. And in a state like Michigan you collect and remit a per-home amount that is neither revenue nor expense — a pass-through liability that has to be tracked per home, per month, and reconciled.

Your lender already requires the split

Even if GAAP does not force you to separate the two registers, your agency lender does.

Fannie Mae's Multifamily Selling and Servicing Guide, in the Underwritten Net Cash Flow provisions, states that gross rental income "includes the MH Site rent for any Affiliate-Owned Manufactured Home or Borrower-owned Manufactured Homes, but excludes the rent (or that portion of the rent) for the Manufactured Home" (Fannie Mae Multifamily Guide, Part III, effective 20 August 2026).

Read that carefully. A POH resident writes one cheque. The GSE requires you to split it into site rent, which counts, and home rent, which does not — for every home, every month. Both agencies also cap POH exposure, and they do not agree on the number: Fannie limits tenant-occupied manufactured homes to 35%, while Freddie Mac's Optigo term sheet caps borrower-affiliate and third-party-owned homes at 25% in aggregate (Freddie Mac Optigo MHC term sheet).

If your system cannot bifurcate a single rent payment into two components on demand, you cannot produce an agency loan package without rebuilding it by hand. The reporting formats, covenant packages and DSCR mechanics are covered in lender and agency reporting for manufactured housing portfolios.

The chart of accounts and the close

Two practical points, briefly, because each has its own guide.

Your chart of accounts has to carry both registers. That means, at minimum, separate revenue accounts for lot rent, home rent, home sales, utility recovery and interest income — and separate asset accounts for site improvements, rental homes, home inventory and notes receivable. If home rent and lot rent post to the same account, the margin comparison above is not something you can ever run on your own portfolio. The MH-specific account tree and a downloadable template are in the manufactured housing chart of accounts; if you are starting from nothing, our general guide to setting up a chart of accounts covers the fundamentals first.

The close is longer than a multifamily close because it has to touch things a rent roll does not: depreciation on rental homes, inventory movements, cost of sales on homes sold, notes receivable and accrued interest, and utility recovery reconciled against the provider invoice. The general framework is in our month-end close checklist for property management finance teams, and the multi-entity mechanics in our guide to structuring a multi-property portfolio.

One metric to build everything toward. The number that makes an MH portfolio comparable to itself over time and to anything else is NOI per occupied homesite — not total NOI, not NOI per site, not the expense ratio. Why that denominator and how to instrument it is in NOI per occupied homesite.

How RIOO handles manufactured housing accounting

RIOO is a property management platform built natively on Oracle NetSuite, and manufactured housing is the clearest case for why that matters. The two-register problem is not a reporting inconvenience. It is an accounting problem, and accounting problems need an accounting system rather than a rent-roll tool with a reporting module bolted on.

In a conventional platform a park-owned home is forced into a unit lease record, which severs the physical asset from the general ledger — the home earns rent in one system and depreciates in another, and nothing reconciles the two. NetSuite closes that gap because both halves live in the same ledger.

• Homesites carry the lot lease, the rent, the escalation rule, occupancy, utility recovery and violation history.
• Park-owned homes are fixed assets with cost, in-service date, depreciation schedule, book value and disposal — inside a real fixed asset register, not a side spreadsheet.
• Homes held for sale are inventory, valued by specific identification, moving to cost of sales when the home closes — with the CapEx and OpEx split on rehab spend enforced when the invoice is coded, not reconstructed at year end.
• Seller-financed homes become notes receivable with amortisation and interest income, on the same customer record as the resident's lot rent.
• One receivable per resident, so a POH resident with a home note is one balance and one ageing line — and the site and home components of that rent are separable, which is what makes an agency loan package a report rather than a project.
• Multi-entity consolidation handles the LLC-per-community structure the sector runs on — the largest public rental-home operator lists more than 180 subsidiaries, most of them one LLC per community — producing investor and lender reporting from source data rather than a spreadsheet roll-up.
• Straight-line rent and deferred revenue under ASC 842 and ASC 606 run in the same ledger as the operational billing.

The test: can you produce the site-register margin and the home-register margin for any community, for any month, without building it? If you carry park-owned home exposure across multiple communities and entities and want to see what that looks like in one system, book a demo.

Conclusion: two businesses, one balance sheet

The mistake at the root of most manufactured housing accounting problems is treating the community as one business that happens to own some homes.

It is two. A land business with a roughly 51% NOI margin, low capital intensity, near-zero turnover and an indefinite asset life. And a home business with a roughly 11% margin, heavy capital, real turnover, a depreciating asset, inventory, cost of goods sold and — if you finance — a loan book. They share a resident, a cheque and a general ledger, and almost nothing else.

Every specific problem in this article follows from failing to separate them: revenue posted to the wrong standard, homes depreciated when they should be inventory, bonus depreciation claimed on assets that do not qualify, gain recognised years before the cash arrives, and an agency loan package that takes three weeks to assemble because nobody can split a rent payment.

The four questions that tell you whether your accounting is actually built for this:

1. Can I report the site register and the home register separately, by community, for any month?
2. For every home I own, do I know whether it is a fixed asset, inventory, or the security behind a note — and does the ledger agree?
3. Can I split a single resident payment into site rent and home rent without touching a spreadsheet?
4. Do I know the NOI per occupied homesite for each community, and how that has moved?

An operator who can answer all four is running a manufactured housing business. An operator who cannot is running an apartment portfolio's accounting over an asset class that is not apartments, and finding out how different they are during due diligence.

Frequently asked questions

Q1. What makes manufactured housing accounting different from apartment accounting?
An MH community runs two overlapping registers: homesites it leases out, and homes it may or may not own. Homesites produce lease revenue only. Park-owned homes produce rental income, sales revenue, cost of goods sold, interest income and depreciation. Conventional property software models "units with leases" and can represent only the first register.

Q2. Is lot rent accounted for under ASC 842 or ASC 606?
Lot rent is an operating lease under ASC 842 from the lessor side. There is no short-term lease exemption for lessors — that election belongs to lessees — so a month-to-month lot lease is still an ASC 842 lease. ASC 606 applies to non-lease revenue such as home sales and certain ancillary services.

Q3. How do you account for the sale of a park-owned home?
It depends on why you held it. A home held as inventory for sale is recognised under ASC 606, producing revenue and cost of goods sold at closing. A rental home sold off is a nonfinancial asset derecognised under ASC 610-20, producing a gain or loss rather than revenue. The same transaction lands in two different places on the income statement.

Q4. Can park-owned homes qualify for bonus depreciation?
Generally no. Bonus depreciation requires a recovery period of 20 years or less, and IRS Publication 527 places a rental manufactured home in the 27.5-year residential rental class. Site improvements such as pads, roads and utility runs are 15-year land improvements and do qualify. Some cost segregation studies take a more aggressive position — discuss it with your adviser.

Q5. Is a manufactured home inventory or a fixed asset?
It follows intent. A home held for rent is a depreciable fixed asset. A home held primarily for sale to customers in the ordinary course of business is inventory under IRC §1221(a)(1), is not depreciable, and produces ordinary income on sale. Communities running both a rental programme and a sales programme hold both at the same time.

Q6. Can a community use the installment method when it seller-finances homes?
Usually not. IRC §453(l)(1)(A) treats a disposition of personal property by someone who regularly sells that type of property on the installment plan as a dealer disposition, which is excluded from installment treatment. The practical effect is that the full gain is recognised in the year of sale while cash arrives over the note's life.

Q7. Does a chart of accounts for a mobile home park need special accounts?
Yes. At minimum it needs separate revenue accounts for lot rent, home rent, home sales, utility recovery and interest income, and separate asset accounts for site improvements, rental homes, home inventory and notes receivable. Posting home rent and lot rent to one account makes it impossible to measure the two registers against each other.

Q8. Do lenders require park-owned home income to be reported separately?
Yes. Fannie Mae's underwritten net cash flow includes the site rent attributable to a borrower- or affiliate-owned home but excludes the portion of rent for the home itself, so a single resident payment must be split into two components. Fannie caps tenant-occupied manufactured homes at 35% of sites; Freddie Mac's Optigo programme caps affiliate and third-party owned homes at 25%.

Q9. Who pays property tax on a manufactured home in a land-lease community?
The community pays real property tax on the land and improvements. Home-level tax falls on whoever owns the home — the resident for a tenant-owned home, the community for a park-owned one. Treatment varies sharply by state: California values the home separately from the site, Florida taxes non-affixed homes as tangible personal property, and Michigan makes the operator collect a monthly specific tax on behalf of the local treasurer.

RIOO is a property management platform built natively on Oracle NetSuite, used by manufactured housing community operators to manage homesites, lot rent, park-owned homes, utility recovery and multi-entity accounting in one system.