What is meant by "operating expenses"?

Operating expenses refer to the ongoing costs that are essential for the maintenance and operation of a property. These expenses typically include items such as property management fees, utilities, routine maintenance, property taxes, insurance, and repairs that are necessary for keeping the property in good condition and ensuring it functions smoothly. Unlike one-time expenses like major repairs or costs incurred during property acquisition, operating expenses are recurrent and part of the daily management of the property. Understanding operating expenses is vital for property managers as it helps in budgeting and determining the overall profitability of a real estate investment.