Glossary of Terms

Operating Expenses 2015-11-10 08:00:00

Operating Expenses

The actual costs associated with operating a property including maintenance, repairs, management, utilities, property taxes and insurance. These items are considered operating expenses as they are expenses any investor would bear in order to operate the property on a day-to-day basis. Operating expenses may be fixed or variable. Operating expenses do not include debt service, income taxes, replacement reserves, capital expenditures or depreciation. These items are not considered operating expenses as they are largely determined by an individual investor’s choice of financing, personal tax situation or specific business plan for the property.

 


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