Expense Ratio Benchmarking Calculator
Compare your property's Operating Expense Ratio (OER) to market benchmarks. Identify opportunities for cost optimization.
How it works
Operating Expense Ratio = Annual Expenses ÷ Gross Rent × 100. Compare your ratio to industry benchmarks by property type and age.
Example
$18,000 expenses ÷ $60,000 rent × 100 = 30% OER (excellent for single-family).
FAQ
What's a good operating expense ratio?
Single-family: 25-35%, Small multifamily: 35-45%, Large multifamily: 40-50%. Lower ratios indicate more efficient operations.
What expenses are included in OER?
Property taxes, insurance, maintenance, repairs, management, utilities (if owner-paid), and vacancy allowance. Excludes mortgage payments and capital improvements.
Why do multifamily properties have higher ratios?
More units mean more maintenance, higher management costs, common area expenses, and typically higher vacancy rates compared to single-family properties.
How can I reduce my expense ratio?
Improve property management efficiency, negotiate better insurance/tax rates, preventive maintenance, energy efficiency upgrades, and tenant screening to reduce turnover.
Should I include mortgage payments in OER?
No, OER only includes operating expenses. Mortgage payments are financing costs, not operating expenses. This allows comparison regardless of financing structure.