I would say around 50%, but there are a lot of factors that play into it. For brand new Class A, you will be around 35-40% vs vintage class C you will be between 55-65%. It really will depend on the utilities and who pays them, tax rates, insurance rates and overall age of the property. Also, very high rents vs very low rents. If you can rent for a major premium, then the expense to income ratio will be low.
I would say around 50%, but there are a lot of factors that play into it. For brand new Class A, you will be around 35-40% vs vintage class C you will be between 55-65%. It really will depend on the utilities and who pays them, tax rates, insurance rates and overall age of the property. Also, very high rents vs very low rents. If you can rent for a major premium, then the expense to income ratio will be low.
The truth is, there really is no "optimal" expense ratio that exists across the board. Your required returns and investmeny strategy will dictate what is optimal for each deal. Because of this, you should look to finding a ratio that is tolerable rather than optimal. This is typically measured within a spectrum because the floor can be easily quantifiable. No matter what you do, there will always be a minimum number that can never be lowered any further, due to fixed expenses.
I prefer to look at expenses per unit versus expense ratio. Taxes are typically your biggest factor - I would recommend discussing with mgmt companies in your area to get a feel for what they operate at based on asset condition and size.
@Gary B. - This is very "it depends" type question. When first evaluating a property I use 50% to test the waters. What market/class are you looking at, your rule of thumb may be a little different.