Property Management
Iowa's operating expense ratio (OER) for a commercial property is calculated as:
ATotal revenues divided by total expenses
BTotal operating expenses divided by effective gross income✓ Correct
CManagement fees divided by gross rents
DNet income divided by property value
Explanation
The Operating Expense Ratio (OER) = Total Operating Expenses / Effective Gross Income. A lower OER indicates more efficient operations. It is used to compare the expense levels of similar properties and assess management effectiveness.
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