What Should Your Multifamily T-12 Cost Per Unit in 2026? The NAA Benchmark Framework for Underwriting Expenses

$777 is what the average U.S. apartment unit paid for insurance in 2024, up 10.8% year over year, on top of a 25% jump in 2023. Total operating expenses across the industry reached $8,657 per unit in 2024, the latest year covered by the NAA's national benchmark survey. This post gives you those category-by-category per-unit figures to screen a broker's T-12 before you trust a single line item, plus a five-point framework for verifying the numbers you need before you set an offer.

Why Per-Unit Benchmarks Beat a Blended Expense Ratio

Most underwriters check a T-12 against one number: the operating expense ratio, total expenses divided by effective gross income.

Operating Expense Ratio = Total Operating Expenses / Effective Gross Income

The ratio tells you whether a deal looks efficient overall. It does not tell you which line item is wrong. A broker's T-12 with understated insurance and overstated payroll produces the same blended ratio as one where every line is honest, since the errors offset each other in the total. Per-unit dollar benchmarks by category catch what the blended number hides. You check each line against a real figure, not against an average where one error cancels another.

This matters most on deals sourced through a broker's marketing package rather than a direct seller relationship. Marketing packages are built to sell the deal. The expense page is the easiest place for a soft number to sit unnoticed until the buyer's own diligence catches it, usually after the LOI is signed.

The 2024 Per-Unit Expense Benchmark, By Category

The NAA's 2024 national benchmark survey, the most recent available heading into 2026 underwriting, covers more than 1 million units across approximately 109 metro markets. It puts operating expenses at these per-unit levels:

• Total operating expenses: $8,657 per unit, up 2.2% from 2023.
• Taxes and insurance combined: $2,998 per unit, up 2.65%.
• Insurance alone: $777 per unit, up 10.8%, following a 25% jump in 2023.
• Administrative and payroll: $2,323 per unit, up 3.81% and nearly 20% higher than 2021.
• Repairs and maintenance: $1,098 per unit, up 3.7% and nearly 28% higher than 2021.
• Utilities: $1,304 per unit, down 3.2%.
• Leasing and marketing: $292 per unit, up 4.6%.

Hold a T-12 up against this table before you accept it. A property reporting $600 per unit in insurance or $700 per unit in repairs and maintenance is not automatically inefficient, and it is not automatically understated either. Treat it as a prompt to verify: pull the declarations page and current premium for insurance, and check work orders, unit-turn history, and capital spending for repairs and maintenance, before you take the seller's figure at face value.

These are national averages, not a fixed rule for any single property. A newer, professionally managed, low-density suburban asset runs below every benchmark here without anything being wrong. A coastal, older, high-density, or operationally troubled asset runs well above it for the same reason. Use the national figure as a screening benchmark, not a floor, then adjust for market, vintage, construction type, staffing model, amenities, and utility responsibility before you question a number sitting far from it.

Why the Insurance Line Needs a Forward-Looking Check

Insurance moved from 1.95% of multifamily revenue in 2000 to 4.78% by 2024, per the NAA's analysis, a structural repricing, not a one-year spike. A separate Federal Reserve survey, cited in the same NAA reporting, shows a comparable pattern from a different angle: per-unit insurance cost near $39 a month in 2019, rising to about $68 a month by 2024, an increase of more than 75%. Two different data sets, pointing the same direction.

A trailing T-12 shows last year's premium, locked in at last year's renewal. If the policy renews before you close, the number on the seller's financials is already stale. Reprice insurance forward using a current quote, declarations page, coverage limits, and deductibles, not the seller's booked expense, before you trust the NOI.

Repairs and maintenance carries a related risk. NAA data shows R&M costs up nearly 28% since 2021, far outrunning the 2.2% growth in total operating expenses recorded in 2024 alone. A T-12 sitting well below the $1,098 benchmark on an older asset is worth a second look at unit-turn history, work orders, and capital spending, rather than an assumption of good management.

The Five-Point T-12 Stress Test

1. Line up every T-12 category against the benchmark table above. Flag anything more than 15% below benchmark for a closer look, not an automatic write-up. A real gap needs verification against source documents, not an assumption of under-reporting.
2. Reprice insurance forward, not backward. Pull a current quote, declarations page, coverage limits, and deductibles from a broker or carrier. Do not underwrite off a premium locked in before the last renewal cycle.
3. Check repairs and maintenance against the asset's age and condition. Pre-1990s vintage properties often run above the $1,098 benchmark. A T-12 sitting well below it on an older asset is worth checking against unit-turn history, work orders, and capital spending before you assume efficiency.
4. Re-run payroll at current market wages, not the seller's frozen headcount and pay scale. Payroll ran nearly 20% higher than 2021 levels by 2024, and the trend has not reversed.
5. Rebuild your operating expense ratio and your NOI off the verified numbers, not the seller's, before you set an offer.

How This Changes Your Going-In Cap Rate

Example: a 100-unit deal with $1,750,000 in effective gross income, priced at $15,000,000.

Seller-reported expenses run $700,000, or $7,000 per unit:

NOI = $1,750,000 - $700,000 = $1,050,000
Cap Rate = $1,050,000 / $15,000,000 = 7.0%

Rebuild expenses at the 2024 national benchmark of $8,657 per unit, or $865,700 total:

NOI = $1,750,000 - $865,700 = $884,300
Cap Rate = $884,300 / $15,000,000 = 5.9%

The seller's numbers show a 7.0% cap rate. The benchmark-corrected number shows 5.9%. This 110-basis-point gap shows how much the answer moves once you rebuild the expense base, not proof the 5.9% figure is correct for this specific property.

Before this number drives your offer, confirm the seller's $700,000 and the NAA benchmark count the same things. NAA's total operating expenses figure excludes debt service, capital costs, and one-time extraordinary items. If the seller's T-12 folds any of those in, or leaves real expenses out, adjust for the mismatch before you compare the two.

The verified gap also flows into your lender's numbers. A lower, verified NOI reduces your DSCR-limited loan proceeds and raises the equity check you need to bring, before you even sit down to negotiate rate and terms. Catching the mismatch early keeps it from showing up as a surprise at the term sheet stage.

How MultiVest Engine Handles This

Checking a broker's T-12 against per-unit benchmarks by hand means pulling category totals off a PDF, dividing by unit count, and comparing each line against outside data open in another tab. MultiVest Engine's document ingestion parses an uploaded T-12 and categorizes every income and expense line automatically, so the per-unit math above starts from a clean, itemized base instead of a broker's summary page.

From there, the T-12 Normalizer walks you through a five-step drawer comparing the seller's numbers against built-in vacancy, management-fee, repairs-and-maintenance, and capital-reserve benchmarks, and writes the corrected figures into your proforma. You still decide which adjustments to accept. The platform removes the manual re-entry between the broker's T-12 and your corrected NOI.

The Bottom Line

A broker's T-12 is a starting point, not a source of truth. Screen every category against the 2024 per-unit benchmarks above, reprice insurance forward instead of trusting the trailing number, and verify anything sitting far from benchmark against real documents before you rebuild your cap rate. The gap between a seller's reported expenses and a verified, property-specific number often decides whether a deal works or falls apart after closing.

References

1. National Apartment Association: Premium Pulse: National Multifamily Insurance Cost Acceleration
2. National Apartment Association: From Momentum to Management: Navigating Elevated Costs in a Constrained Operating Environment
3. National Apartment Association: Where Does a Dollar of Rent Go?
4. National Apartment Association: Smooth Sailing in Insurance's Wake
5. HelloData: What Is an Operating Expense Ratio in Multifamily?