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How to use
- Enter Operating expenses.
- Enter Effective gross income.
- Calculate, then verify input definitions before comparing properties or periods.
How it is calculated
Expense ratio = operating expenses ÷ effective gross income × 100
Example
Expenses 42,000 on effective income 120,000 give a 35% expense ratio and arithmetic NOI of 78,000.
Important notes
Make sure income and expenses cover the same period and exclude debt service when you want a pure operating ratio.
Worked examples and interpreting results
| Case | Calculation | Result |
|---|---|---|
| Expense ratio | 42000 ÷ 120000 × 100 | 35 % |
| NOI | 120000 − 42000 | 78,000 |
Frequently asked questions
Is a lower expense ratio always better?
Not always. It may reflect efficiency or under-spending on maintenance. Compare property type, age and quality.
Should inputs cover the same period?
Yes. When comparing income, expense, balance or price figures, keep the period and definitions consistent.
Is the result a final property valuation?
No. The calculator gives a numerical relationship only; real decisions also depend on location, market conditions, taxes, financing and risk.