Important context:  CBRE has reported that average OERs for multifamily assets have increased by 1–2 percentage points compared to pre-pandemic levels, so what was considered “normal” in 2019 may look different today. Don’t panic if you’re slightly above historical norms—but do investigate if you’re significantly above your comp set.

National Expense Benchmarks: Where Does Your Property Stack Up?

According to Yardi Matrix, which tracks operating data on more than 20,000 multifamily properties nationwide, the average annual operating expense per apartment unit in the U.S. reached $8,950 as of January 2024—a 7.1% year-over-year increase. Between Q1 2021 and Q1 2024, per-unit expenses surged by $445, representing a cumulative 24.4% increase. While expense growth has moderated heading into 2025, average per-unit costs remain roughly 39% above pre-pandemic levels.

The good news? By Q1 2025, overall expense growth slowed to its lowest rate since early 2021, with two-thirds of U.S. regions now reporting annual growth below their pre-pandemic five-year averages. But that doesn’t mean you can take your foot off the gas—your individual property could still be wildly out of step with these national numbers.

Breaking Down the Expense Categories: Know Your Numbers

To truly benchmark your property, you need to go deeper than the total OER. You need to understand what share of your budget each category should represent and how growth rates in each area compare to industry trends. Below is a breakdown based on NAA/IREM benchmarking data and Yardi Matrix research.

*Insurance growth decelerated from 27.7% in early 2024 to approximately 7% by Q1 2025, per RealPage data.

The Expense Categories That Should Keep You Up at Night

Insurance: The Biggest Disruptor

If there is one line item that has devastated multifamily budgets in recent years, it is property insurance. National insurance costs have surged roughly 135% since 2018, according to Yardi Matrix. At the peak in early 2024, premiums were climbing at nearly 28% year-over-year. Some operators in disaster-prone areas of the Southeast and Southwest saw increases of 50% to 200%. Carriers have become increasingly selective, canceling policies and exiting entire states.

What to benchmark: Insurance currently represents about 7% of total operating expenses nationally, with an average cost of approximately $636 per unit. If your per-unit insurance cost is significantly above this—especially in non-disaster-prone markets—it’s time to shop your policy aggressively. Consider increasing deductibles, bundling policies, or working with an insurance broker who specializes in multifamily.

Property Taxes: Your Largest Fixed Expense

Property taxes typically account for 26% to 40% of total operating expenses, making them the single largest budget line item. NAA benchmarking data showed a 9.7% increase in property taxes in 2023, with more than one-third of metro areas experiencing double-digit growth. Markets like Orlando, San Diego, Los Angeles, and Chicago saw increases ranging from 17% to 50%.

What to benchmark: Taxes are largely non-controllable, but they’re also the most commonly over-assessed expense. If your property taxes seem high relative to comparable properties in your submarket, consider engaging a tax appeal consultant. Many operators leave money on the table by not challenging their assessments.

Repairs & Maintenance: Where Efficiency Matters Most

R&M costs grew at 8.8% in 2024, driven by increased labor costs and materials inflation. Maintenance technician wages have continued climbing, leading many operators to rely more heavily on outside vendors—which often costs more. A common rule of thumb is to budget 1.5 to 2 times the monthly rental rate per unit per year for maintenance, though newer properties will typically fall below this range.

What to benchmark: If your R&M costs exceed 12% of total OpEx or $1,100+ per unit annually on a stabilized property, start investigating. Are you relying too heavily on outside contractors? Is deferred maintenance creating expensive emergency repairs? Proactive, scheduled maintenance almost always costs less than reactive fixes.

The 7-Step Expense Self-Audit Framework

Here is a practical framework you can use today to evaluate whether your expenses are in line:

Step 1: Calculate Your OER

Divide your total annual operating expenses by your gross operating income. If you’re above 50%, you have work to do. If you’re between 35–45%, you’re in the healthy range.

Step 2: Calculate Your Cost Per Unit

Divide total annual OpEx by your total number of units. Compare this to the national average of approximately $8,950 per unit, adjusting for your market. Per-unit analysis is the gold standard for multifamily expense comparison—it normalizes for property size and makes apples-to-apples comparison possible.

Step 3: Break Down Each Category as a Percentage of Total OpEx

Compare each expense category against the benchmark ranges in the table above. Flag any category that is significantly above the typical percentage range for deeper investigation.

Step 4: Compare Year-Over-Year Growth Rates

If any single expense category grew faster than the industry average growth rate for that category, ask why. Was it a one-time event, or a structural problem? Pre-pandemic, total expense growth averaged about 3.5% per year. If your total OpEx is growing faster than 5–7% annually in the current environment, investigate.

Step 5: Build Your Own Comp Set

National averages are useful, but local comparisons are better. Every brokered deal that hits your inbox is a potential expense comp. Record the per-unit expenses from each offering memorandum you review and build a local database over time. Track by property class (A, B, C), unit count, and submarket. Comparing a 45-unit property to a 375-unit property is not a reliable strategy—unit count, asset class, and market context all matter.

Step 6: Get Hard Numbers Where Possible

Many operating expenses don’t need to be estimated. Property tax information is public record. Insurance and management fees can be confirmed through vendor quotes. Utility costs can be verified with the local utility provider. The more hard numbers you plug in, the less you’re relying on assumptions.

Step 7: Separate CapEx from OpEx

A common mistake—especially among smaller private owners—is lumping capital expenditures into the R&M line item. This inflates your apparent operating expenses and makes benchmarking unreliable. Always strip out CapEx (roof replacements, HVAC overhauls, major renovations) from your operating expense analysis.



Controllable vs. Non-Controllable: Focus Your Energy

Not all expenses are created equal. Understanding which costs you can influence—and which you cannot—is essential for prioritizing where to invest your time and attention.

The most immediate ROI typically comes from renegotiating vendor contracts, implementing preventive maintenance programs, investing in energy-efficient upgrades, and critically evaluating whether your management structure is right-sized for your property.

Regional Factors: One Size Does Not Fit All

Operating expenses vary dramatically by region. The Southeast and Southwest experienced the steepest expense growth in recent years (11% and 10.3% respectively in 2023), driven partly by insurance cost spikes tied to weather events. Meanwhile, markets like the Northeast and West Coast tend to have higher absolute per-unit costs but relatively more stable growth rates.

In the Pacific Northwest, where many of our readers invest, operating expenses have their own unique profile. Oregon markets like Portland saw expense growth around 8.2%, while Washington state has its own regulatory considerations including recent statewide rent control provisions under HB 1217 that can affect how quickly you can adjust rents to offset rising costs.

By Q1 2025, Texas led the nation with the smallest year-over-year change in multifamily expenses at just 15 basis points, while Florida registered sub-1% growth after years of some of the steepest increases. Regional trends shift quickly, so staying current with local data is essential.

Actionable Strategies to Bring Expenses In Line

If your self-audit reveals that certain expense categories are running above industry benchmarks, here are proven strategies operators are using:

1.    Shop insurance aggressively every renewal cycle.  Work with a broker who specializes in multifamily. Consider raising deductibles, bundling properties, or exploring excess and surplus (E&S) carriers if standard markets have priced you out.

2.    Appeal your property tax assessment.  Engage a tax consultant who works on contingency. You only pay if they save you money. Given double-digit tax increases in many markets, the potential savings can be substantial.

3.    Invest in energy efficiency.  LED lighting, low-flow fixtures, smart thermostats, and Energy Star appliances can meaningfully reduce utility costs. Many utility companies offer rebate programs that offset the upfront investment.

4.    Implement RUBS (Ratio Utility Billing Systems).  Passing through a portion of utility costs to tenants incentivizes conservation and shifts variable costs off your operating budget.

5.    Centralize operations and leverage technology.  Property management software, automated rent collection, virtual leasing tours, and smart access systems can reduce administrative and payroll costs across your portfolio.

6.    Competitively bid vendor contracts annually.  Landscaping, cleaning, pest control, and other contract services should be rebid regularly. Loyalty doesn’t always mean you’re getting the best price.

7.    Prioritize preventive over reactive maintenance.  Scheduled inspections and proactive repairs cost a fraction of emergency fixes. A single deferred plumbing issue can turn into a $10,000+ water damage claim.

8.    Right-size your management fees.  Management fees typically run 3–8% of gross revenue for larger communities and 8–10%+ for smaller properties. If you’re paying above market, get competitive bids. If your current manager isn’t delivering value, the most expensive manager is the one who costs you occupancy and NOI.

The Bottom Line

Knowing whether your expenses are in line with industry standards isn’t optional—it’s a core competency of professional multifamily investing. The operators who will thrive in this environment are the ones who treat expense management with the same rigor they apply to revenue growth.

Here are the numbers to keep in your back pocket:

•      Target OER:  35–45% for well-managed properties

•      National average per-unit OpEx:  ~$8,950/year (as of January 2024)

•      Pre-pandemic expense growth norm:  ~3.5% per year

•      Current expense levels:  ~39% above pre-pandemic benchmarks

•      Biggest watch items:  Insurance, property taxes, and R&M

Run the self-audit. Build your comp database. Challenge every line item. Your NOI—and your investors—will thank you.