Property Management
In Michigan, the 'operating expense ratio' (OER) is calculated as:
ANOI divided by total property value
BTotal operating expenses divided by effective gross income✓ Correct
CMortgage payments divided by NOI
DTotal expenses divided by potential gross income
Explanation
OER = Total Operating Expenses / Effective Gross Income. A higher OER means a larger percentage of income is consumed by expenses, leaving less for the owner. Michigan investors use OER to compare efficiency across properties.
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