Property Management
The 'operating expense ratio' (OER) for a Louisiana property is:
ANOI divided by total investment
BTotal operating expenses divided by effective gross income — indicates what percentage of income goes to operating costs✓ Correct
CTotal income minus operating expenses
DThe ratio of fixed to variable expenses
Explanation
Operating Expense Ratio = Operating Expenses ÷ Effective Gross Income. A lower OER indicates more efficient operations. A higher OER may indicate excessive expenses or management inefficiencies relative to income.
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