what are all the costs in net operating expenses?

In Selling Property - Asked by John S. - Apr 9, 2011
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Answer(s)

Chris R.
Broker/Agent
Denton, TX

May vary from area to area / property type, etc. but basically - in general - all normal day to day operating expenses would be defined as the cost of operating an office building, shopping center, etc. such as janitorial, management fees, maintenance, supplies, elevator service, HVAC, plumbing, electrical repairs and the like, utilities, and similar day to day expenses, as well as taxes, insurance, and a reserve for replacement of items which periodically wear out. Should not include capital expenses such as roof replacement nor expenses associated with the production of income such as leasing commissions and legal fees. May include part - or all - of an employee (s) expenses relative to that particular property - depending on size and if that employee has other properties where his expenses would be pro-rated.

Apr 9, 2011
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Sidney H.
Jacksonville, FL

There is no standard across the board. Each landlord usually has a specific list of what is included in the operating expenses at their property. The best thing to do is ask the landlord of the property you are interested in for a "blank" lease - many landlords will let you review their lease form if you are interested in their property. Just to give you a general idea though, net operating expenses include (but are not limited to) items such as utilities, garbage pickup, and cleaning services.

Apr 9, 2011
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Matthew C.
Broker/Agent
Indianapolis, IN

Chris R. Pretty much summed up how i would have responded but it is always easier to ask each individual landlord as my experience has been that they are always different from landlord to landlord.

Apr 11, 2011
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