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Updated almost 6 years ago on . Most recent reply
Expenses as % of EGI optimal level in multi-family
Hi Fellows, when you evaluate multi-family deal, what is the optimal level of expenses as % of EGI you recommend?
Best, Gary
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Todd Dexheimer
#2 Multi-Family and Apartment Investing Contributor
#2 Multi-Family and Apartment Investing Contributor
- Rental Property Investor
- St. Paul, MN
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Todd Dexheimer#2 Multi-Family and Apartment Investing Contributor
#2 Multi-Family and Apartment Investing Contributor
- Rental Property Investor
- St. Paul, MN
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.