Operating Expense Ratio Calculator

About this calculator

The operating expense ratio (OER) measures what share of a rental property's gross operating income is consumed by running costs — property management fees, maintenance, insurance, property taxes and utilities — excluding mortgage principal and interest, capital expenditures and income taxes. The formula is OER = operating expenses ÷ gross operating income, expressed as a percentage.

Real estate investors and property managers use OER to judge how efficiently a building is being run and to compare properties of different sizes on a level playing field, since it strips out the effect of financing. A lower OER generally signals a leaner, better-managed property; typical residential rentals fall somewhere between roughly 35% and 80%, with older buildings and those carrying heavier management or maintenance loads sitting at the higher end.

This calculator takes your property's operating expenses and gross operating income and returns the OER, so you can benchmark it against comparable properties or track it over time as your costs change.