Property Management

A net operating income (NOI) statement for a managed property deducts which of the following?

AMortgage payments and capital improvements
BOperating expenses such as taxes, insurance, utilities, and maintenance, but NOT debt service✓ Correct
COnly capital improvement costs
DOnly vacancy losses

Explanation

NOI = Effective Gross Income − Operating Expenses. Operating expenses include taxes, insurance, utilities, maintenance, management fees, and reserves — but NOT debt service (mortgage payments) or capital expenditures.

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