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Understanding Operating Expense Ratios
The operating expense ratio (OER) is very common in real estate analysis, whereby analysts are measuring the costs to operate a piece of property versus the income it generates.
Why the Operating Expense Ratio Matters
Operating expenses are costs associated with running a business's core operations on a daily basis. Thus, the lower a company's operating expenses are, the more profitable it generally is. Over time, changes in the OER indicate whether the company can increase sales without increasing operating expenses proportionately (i.e., if the business is scalable). In multifamily real estate, companies can compare properties by using the ratio.
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By Bryan Chavis
5
2626 ratings
The operating expense ratio (OER) is very common in real estate analysis, whereby analysts are measuring the costs to operate a piece of property versus the income it generates.
Why the Operating Expense Ratio Matters
Operating expenses are costs associated with running a business's core operations on a daily basis. Thus, the lower a company's operating expenses are, the more profitable it generally is. Over time, changes in the OER indicate whether the company can increase sales without increasing operating expenses proportionately (i.e., if the business is scalable). In multifamily real estate, companies can compare properties by using the ratio.
JOIN OUR APARTMENT INVESTING COACHING PROGRAM Multifamily Matrix: https://multifamilymatrix.com
LET CONNECT 💯
► WATCH MORE: https://bryanchavis.com/youtube
► ASK A QUESTION FOR THE SHOW: https://anchor.fm/bryanchavis
► CATCH UP on What You Missed: https://anchor.fm/bryanchavis
► FOLLOW Bryan Chavis on Instagram: https://www.instagram.com/bryan.chavis
► LIKE Bryan Chavis on Facebook: https://www.facebook.com/BryanChavisOfficial
► SUBSCRIBE to Bryan Chavis on YouTube: https://goo.gl/Y36snF
Join Apartment Investor and Author of Buy It, Rent It, Profit Bryan Chavis as he discusses the how-to's of apartment investing and managing multifamily properties.
#BryanChavis
#Multifamily
#BuyTheBlock