Variable Expenses are expenses that vary with occupancy. Variable expenses are often called Operating Expenses since these are the expenses that are needed for day to day operations of the property and to maintain the income stream.
A partial list of variable expenses follow:
|1.||Management fees (usually a percent of effective gross income)|
|4.||Payroll, payroll taxes, and employee benefits|
|5.||Painting and decorating|
Variable expenses reported in the reconstructed operating statement are not the actual expenses reported by the owner but rather a forecast by the appraiser of what the expenses will be in the following year.