Accredited Wealth Management Advisor Practice Exam

Which component is not part of the annual operating expenses for the Sierra Blanca complex?

1. Property taxes

2. Maintenance and utilities

3. Marketing expenses

4. Swimming pool

The correct answer is: Marketing expenses

The annual operating expenses for a property typically encompass all the costs necessary to maintain and operate the property effectively. These include property taxes, maintenance and utilities, and even marketing expenses, which are important for attracting tenants and ensuring occupancy. However, the swimming pool does not fall under operational expenses in a traditional sense, as it is a physical feature of the property rather than a recurring cost directly associated with operating the facility. While a swimming pool may require maintenance and related expenses, it is considered a capital asset or improvement rather than an ongoing operational expense. Therefore, the costs directly associated with basic operations would exclude it from the categorized annual operating expenses, making marketing expenses the exception as they are directly involved in the management strategy for the property. Understanding these distinctions helps in analyzing property financials accurately.