Definition: An operating expense that tends to change with occupancy or the level of property operation.
Example
Cleaning, some utility costs, and occupancy-related supplies increase as more space is occupied.
Keep the distinction clear
Not every expense changes at the same rate as occupancy. Debt service is generally separated from operating expenses in a standard net-operating-income calculation.
Related terms
Net Operating Income (NOI) ยท Effective Gross Income (EGI)
Keep studying
References: FREC Course II syllabus, Session 7
Comments
0 comments
Article is closed for comments.