IREM Certified Property Manager (CPM) Practice Test 2025 – All-in-One Guide to Exam Success!

Question: 1 / 400

Which of the following is NOT typically an example of an operating expense?

Utilities

Real estate taxes

Cost of purchasing new property

The cost of purchasing new property is not typically considered an operating expense. Operating expenses refer to the costs associated with the day-to-day functioning of a property, which includes expenses such as utilities, insurance premiums, and real estate taxes. These are regular expenditures that the property manager will encounter in the course of maintaining and operating the property.

In contrast, the purchase of new property is classified as a capital expenditure. This type of expenditure is associated with acquiring long-term assets that are intended to provide benefits over a longer period rather than recurring costs for the operation of existing properties. Understanding the distinction between operating expenses and capital expenditures is essential for effective property management and budgeting.

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Insurance premiums

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