What term describes the ongoing expenses associated with running a rental property?

What term describes the ongoing expenses associated with running a rental property?

• A. Amortization
• B. Operating costs
• C. Revenue
• D. Investment yield

Answer: (B)

The term that describes the ongoing expenses associated with running a rental property is "operating costs." Operating costs include various expenses necessary for the day-to-day functioning of the property. These can encompass maintenance, repairs, property management fees, utilities, insurance, and property taxes. Understanding operating costs is crucial for property owners and investors since they directly impact cash flow and profitability. Other terms like amortization refer to the gradual repayment of a loan, which doesn't encompass ongoing expenses. Revenue pertains to the income generated from the rental property, while investment yield usually refers to the return on investment, often expressed as a percentage, not the day-to-day costs required to maintain the property. Therefore, the concept of operating costs aligns perfectly with the context of managing rental properties.

The term that describes the ongoing expenses associated with running a rental property is "operating costs." Operating costs include various expenses necessary for the day-to-day functioning of the property. These can encompass maintenance, repairs, property management fees, utilities, insurance, and property taxes. Understanding operating costs is crucial for property owners and investors since they directly impact cash flow and profitability.

Other terms like amortization refer to the gradual repayment of a loan, which doesn't encompass ongoing expenses. Revenue pertains to the income generated from the rental property, while investment yield usually refers to the return on investment, often expressed as a percentage, not the day-to-day costs required to maintain the property. Therefore, the concept of operating costs aligns perfectly with the context of managing rental properties.