Which of the following is NOT considered an operating expense for real estate investments?

Debt service is not considered an operating expense for real estate investments because it refers specifically to the payments made towards the mortgage or loans taken out to finance a property. Operating expenses are costs necessary for the day-to-day functioning and maintenance of a property, such as property taxes, insurance, and maintenance costs. These costs are typically deducted from the property’s income when calculating net operating income (NOI), which is a crucial metric for evaluating the performance of real estate investments. On the other hand, debt service pertains to financing costs rather than ongoing operational expenditures, making it a separate category in financial analysis. Understanding these distinctions is essential when managing investments and assessing their profitability.