Your water/sewer loss should match your collections % loss on rent + leaks. If you plan on cleaning house on this park, then expect to not collect the water billings in addition to the rent. For leaks, that will depend completely on the park. Just for leaks, I think 10% is a reasonable, conservative number to use when making offers where buyer and seller can agree.
Another thing to consider is that it’s somewhat unlikely that all of the meters in the park actually track the usage correctly. For example, if the meters were installed 25 years ago, they may not capture all of the usage and many might not register anything at all. Just food for thought.
The point is, when you look at the utility line items on a P&L and you see the expense as X and the revenue as Y, where Y is much lower. This doesn’t always point to massive leaks. It can be an inaccurate use of a billing variable by the owner, it can be faulty meters, it could be the manager fudging the readings for his or her friends, it could be that the collections are horrid throughout all operations of the park. All present an opportunity, but it is up to you to figure out what the problem really is during diligence.
Last thing, you may also see a slightly higher loss just based on the day the meter is read each month. If the park you are looking at reads on the 4th and bills in the following month’s rent, then your eviction tenants get three free extra weeks of water. If you instead read on the 25th and bill 5 days later, then you cut out those three free weeks. Just doing that can save you a few hundred bucks a year on a 50 space park.