As I have begun to analyze MHP income statements / P&L’s, I have found it difficult to tell whether individual expense items are within normal ranges.
So for example, I may have a park with a high expense ratio (ie 48%), but I am having trouble figuring out which specific expense items are higher than would be expected/optimal. For example, insurance might make up 10% of this number (% of gross income), but I am unsure as to whether this is a red flag and way too high, or within normal limits. Because of this, knowing that normally insurance should be between 2-5% (or whatever it actually should be) of gross income would be very valuable for looking through P&L’s more efficiently.
Although I am sure with time and experience looking at many P&L’s I will naturally build a picture of what is normal and what might be a red flag to look out for, but I was wondering if any more seasoned investors would be willing to share common/reasonable ranges for some of these? Because these expense percentages are impacted by many variables perhaps percent ranges for primarily pad rental based parks on city water and sewer would be a good baseline. A few items I was interested in include -
Insurance (?% - ?%)
Repair and Maintenance (?% - ?%)
Management (?% - ?%)
Property Tax (?% - ?%)
Electricity (?% - ?%)
Heat (?% - ?%)
Water (?% - ?%)
Sewer (?% - ?%)
Garbage Removal (?% - ?%)
I am working on a spreadsheet (I am not allowed to post pictures yet) that I would be more than happy to share with anyone that might be interested once I have some of these ranges filled out!