Average Expense Ratios on LT rentals

[Christopher Mooney]

Hey all,

Have a portfolio of 6 properties in Cleveland, OH and as I'm looking to scale, I'm trying to better understand the numbers and essentially take a more active "Asset Manager" type of role, while allowing my property manager to do their thing.

Looking at my Profit & Loss statement from 2022, expenses were about 53% of income (excluding mortgage costs). For a couple properties, that amount was low (30%) while other properties it was very high (80%) due to ruptured sewage pipes (I'll always pay to have sewage lines inspected during due diligence moving forward!) and other maintenance headaches.

My question/scenario is two fold.

First, I believe 50% expense ratio is kind of a benchmark number a lot of investors use. What's everyone's thoughts on that?

Second, could I reasonably expect this ratio / the expenses to go down over time? While having 6 properties is commendable, I feel like I'm barely turning a profit here and it really feels like something has to work better or be done differently in the long run to truly grow massive wealth with real estate.

Thanks all!

Mooney