Real estate & rental
Rental Operating Expense Ratio Calculator
What share of rent goes on running the property, and how it compares with typical ranges.
Result
An arithmetic tool, not investment advice. Property returns depend on the local market, the condition of the building, financing terms and tax position, none of which a calculator can see. Verify the income and expense figures against actual statements rather than a seller's projection. Typical ranges vary enormously by age, location, property tax regime and who pays utilities. A suspiciously low ratio on a seller's numbers is the single most common warning sign in a listing, and usually means deferred maintenance, no management fee or no reserves.
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About this calculator
My ratio is 22%. Is that good?
On residential property it usually means something is missing. Check that property tax, insurance, management, maintenance and vacancy are all in there at realistic figures.
Why is commercial so much lower?
Triple net leases pass taxes, insurance and maintenance to the tenant, so the landlord's operating expenses are small. The ratios are not comparable across lease types.
The formula
operating expense ratio = operating expenses / effective gross income
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