Property Management
The Operating Expense Ratio (OER) for an income property is calculated as:
ANOI ÷ Effective Gross Income
BOperating Expenses ÷ Effective Gross Income✓ Correct
CGross Income ÷ Sale Price
DDebt Service ÷ NOI
Explanation
The Operating Expense Ratio = Operating Expenses ÷ Effective Gross Income. It measures what percentage of income is consumed by expenses. A lower OER generally indicates a more efficiently managed property.
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