Property Management Licensing Practice Exam · Question
When preparing an operating budget for a residential property, which of the following is typically categorized as an operating expense?
Property management fees are recurring expenses necessary for the day-to-day operation of the property, making them an operating expense. The other options are
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Question: When preparing an operating budget for a residential property, which of the following is typically categorized as an operating expense?
Answer options:
- Purchase of a new elevator system
- Repainting of all common hallways ✅ Property management fees
- Replacement of the building's roof
Correct answer: Property management fees
Explanation: Property management fees are recurring expenses necessary for the day-to-day operation of the property, making them an operating expense. The other options are capital expenditures.
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