Updated over 6 years ago on . Most recent reply
Property Analysis: Operating Expense Percentage
When analyzing a multifamily rental property, what is a good percentage to use for operating expenses (e.g. 10%, 20%, 30%)? Thank you!
Most Popular Reply
If you're deciding whether or not to analyze a deal, a 50% rule (or similar) is OK to use. But once you decide to analyze a deal, you need to underwrite using actual dollars and actual percentages (for property management). Using rules like this in large multifamily can lead you in to bad deals, and/or keep you from buying good deals.