When calculating the net operating income of a property, it is important to identify any expenses that will be incurred in attempts to maintain the property. All of the following would be considered operating expenses EXCEPT:
A) Property taxes
B) Property insurance premiums
C) Mortgage payments
D) Utility expenses

Question

Quizplus · Accepted Answer

Operating expenses are expenses directly related to the ongoing operation and maintenance of the property. Property taxes, insurance premiums, and utility expenses are all examples of operating expenses. However, mortgage payments are not considered operating expenses as they are payments made towards the property's financing and do not relate to the day-to-day operation of the property.

When Calculating the Net Operating Income of a Property, It