Definition
Operating expenses divided by effective gross income, indicating how efficiently a property runs.
Example
An operating expense ratio of 62% on an apartment building signaled either deferred maintenance or misstated income.
Related terms
Frequently asked questions
What does Operating Expense Ratio mean in real estate?
Operating expenses divided by effective gross income, indicating how efficiently a property runs.
How is Operating Expense Ratio used in practice?
An operating expense ratio of 62% on an apartment building signaled either deferred maintenance or misstated income.
This definition is provided for educational purposes. Legal and tax terminology can carry jurisdiction-specific meaning — confirm with a licensed professional before relying on it in a transaction.