Property Management
A property manager preparing an annual operating budget should include all of the following EXCEPT:
AProjected maintenance and repair expenses
BAnticipated mortgage principal reduction✓ Correct
CProperty tax and insurance expenses
DReserve fund contributions
Explanation
An operating budget covers operating income and expenses — costs of running the property. Mortgage principal reduction is a financing (capital) item, not an operating expense, and is not typically included in an operating budget.
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