Which term describes ongoing expenses necessary for the operation of a property?

The term "operating expenses" refers to the ongoing costs associated with the day-to-day functioning of a property. These expenses typically include costs for utilities, property management, maintenance, cleaning, insurance, and property taxes, among others. They are essential for maintaining the property and ensuring it is fully operational and tenant-ready.

This term is fundamentally linked to the regular, necessary expenditures that a property owner faces, distinguishing them from other financial terms. For example, “capital expenditures” involve larger, infrequent investments in significant improvements or repairs that enhance the property's value, while "fixed costs" denote expenses that remain constant regardless of usage, and "variable costs" fluctuate based on the level of activity or occupancy.

Therefore, operating expenses provide a comprehensive understanding of the financial obligations necessary to keep the property functional and profitable over time.