Expense Ratio on Smallish Park

What would an expense ratio be on a small park.

I have heard Parks around 20 units and under can run up to 50% expenses.

This park:

 -34 lots

 -25 occupied lots at $220. Most are owner occupied. 

 -Park is fairly small with not too much to mow.

 -Fairly low property taxes in the state.  (Only 1.25%)

 -Water is submetered. City water/sewer 

 -Has a few more lots to fill, but the mowing on empty lots is fairly minimal. 

What would be the rough expense ratio?

Submetered so 30%

Smaller park so 50%

Cheaper state and submetered and not that small so 40%???

We would use 50% as the basic guess in establishing a benchmark value for negotiating the deal. But it’s possible that it would be lower, when you analyze it much more accurately in due diligence. One of the big problems in small park expense ratios is the punishment you get from fixed costs that are spread over so few lots. For example, minimum insurance rates will come into play, as well as heavy per lot punishment from just the travel cost of visiting the park (assume it costs $1,000 to visit the park annually, that’s $50 per lot at 20 lots, but only $10 per lot if you spread it out over a 100 space park).

The real expense ratio is what you figure out in precise detail during due diligence.

After due diligence my best guess is 40%. But I can tinker with the numbers and guess higher or lower based on assumptions.

I have the park at @ an 11.5 cap with 40% expense ratio.

Demand is very high and park is right next to other parks that run $60-$70 higher lot rent.

Park is local so I have no travel expense.