Property Management

The 'operating expense ratio' (OER) for an investment property is calculated as:

AA. Net Operating Income ÷ Gross Income
BB. Operating Expenses ÷ Gross Income✓ Correct
CC. Mortgage Payment ÷ Gross Income
DD. Net Income ÷ Total Expenses

Explanation

OER = Total Operating Expenses ÷ Gross Operating Income. A lower OER indicates a more efficiently operated property.

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