Platform · Glossary
OpEx ratio.
Operating expenses divided by gross rental income, expressed as a percentage. The in-product tooltip is brief and accurate: "Operating expenses as a share of gross income."
OpEx ratio = Operating Expenses ÷ Gross Income
What's typical
For single-family rentals managed by owners, OpEx ratios typically fall in the 35–45% range. With professional management added, 40–50% is more realistic. Small multifamily often runs higher because of more shared systems and amenities.
If a pro forma shows an OpEx ratio below 30%, something is being left out. The most common omissions: maintenance budgeted too low, management excluded, capital reserves ignored, or vacancy assumed at zero.
What a high OpEx ratio signals
OpEx ratios above 55% in an otherwise-healthy market usually point to one of three things: older or deferred-maintenance buildings, heavy turnover (each turn brings make-ready and lost rent), or properties where the rental market hasn't kept up with the cost stack. None of these are deal-killers in isolation, but the higher the ratio, the less margin the deal has for surprises.