I am looking for the expense ratio of a park that has no expenses for water, sewer, electric, or road repairs.
All utilities are handled by third parties with direct bill to the customer and the roads are maintained by the county.
Park is 75 lots 65 filled and lot rent of $160.
I am having a hard time guessing what the expenses should be.
Thank you!
If the only sewer line you are responsible for is a short run from the home to the city that’s pretty nice.
160 is a low rent. Hopefully the the lot rent is under market which would make this a very attractive deal if test adds show high demand. If this happens to be market rent and inline with apartments then you need to increase your scrutiny of the market. It’s possible it’s the nicest park in the area and you need to lead the charge by setting a new level of rents.
If the park has been maintained and tenants appear to like living there I would still use roughly 30% to be conservative.
One big unknown is your property tax rate. If it is really high like I’ve seen in parts of Michigan then that can change your numbers.