Nevada Property Management Practice Test 2025 – Your Comprehensive All-in-One Guide to Exam Success!

Variable expenses are costs that change based on the level of occupancy. This means that as more tenants occupy a property, certain expenses will increase, while they will decrease when occupancy levels drop. Examples of variable expenses include utilities, maintenance, and supplies, all of which tend to rise with an increase in the number of tenants who utilize these services.

In contrast, fixed expenses remain constant regardless of occupancy levels. These include costs such as property taxes, mortgage payments, and insurance premiums, which do not vary with how many tenants are living in the property. Operating expenses generally encompass both fixed and variable costs associated with managing and maintaining a property. Capital expenses refer specifically to funds used for acquiring or upgrading physical assets, which do not fluctuate with occupancy and are typically not considered in the same context as occupancy-related expenses. Thus, variable expenses are the correct choice for expenses that fluctuate based on occupancy levels.