OER & Expense Ratios: The Hidden Red Flags

Neerja Kwatra
Oct 29
1 min read

Your Operating Expense Ratio (OER) shows efficiency — or waste.

Formula: OER = Operating Expenses ÷ Gross Operating Income Benchmarks:

<40% = Excellent
40–60% = Acceptable
60%+ = Red Flag

Why It Matters: Even small OER improvements can dramatically increase property value. Lower OER = higher NOI = stronger valuations.

Insight: Don’t just chase rent growth. Protect returns by tightening expenses first.

⚠️ This blog is for informational purposes only. It may not apply to your specific situation. Please consult your CPA.

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