Question

Which item would be classified as a fixed expense in the calculation of net operating income?

Answer 1

Answer:

HAZARD INSURANCE is included as part of a fixed expense in the calculation of net operating income(also ppty taxes).

Explanation:

Mortgage payments are not considered as opex because they are not directly associated with the maintenance and operation of the property.

Hazard insurance is coverage that protects a property owner against damage caused by fires, severe storms, earthquakes, or other natural events. As long as the specific weather event is covered within the policy, the property owner will receive compensation to cover the cost of any damage incurred. Typically, the property owner will be required to pay for a year's worth of premiums at the time of closing, but this will depend on the exact details of the policy.