Hi - quick modeling question. The building has 400 units, 300 which are rented. Opex is $250 / unit / month. Would you calculate opex based on the 300 units rented? Or would you opex spend be based on the 400 total units? Thank you!
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Based on the most helpful WSO content, operating expenses (OPEX) are typically calculated on a per unit basis, regardless of whether the units are rented or not. This means you would calculate OPEX based on the total number of units in the building.
For your scenario: - Total units: 400 - OPEX per unit per month: $250
Therefore, the total monthly OPEX would be: [ 400 \text{ units} \times \$250 \text{ per unit} = \$100,000 \text{ per month} ]
This approach ensures that all potential costs are accounted for, including those associated with vacant units.
Sources: Multifamily Rent Per Square Foot vs. Rent Per Unit, Student Housing Model, HOW DO YOU DETERMINE YOUR UNIT MIX?, Associate guide on analyzing an income statement, Resi OPEX Costs
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