---
title: "Operating expenses — What It Means | Ondo RE"
canonical: https://www.ondorealestate.com/glossary/operating-expenses/
---

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# Operating expenses

Also called: opex

The recurring costs of running a property: taxes, insurance, management, maintenance, and owner-paid utilities.

Operating expenses are the ongoing costs of keeping a property rented. They exclude the mortgage, which is debt service, and exclude capital expenditures, which are large infrequent replacements.

Understating them is the most common flaw in a rental projection. Management and maintenance are real costs even when you do the work yourself. You are paying with time.

## Put a number on it

This term feeds the calculators below.

- [Self-Manage vs Ondo RE CalculatorCompare annual net income from self-managing your Utah rental vs handing it to Ondo, including the hidden cost of your own time.](/calculators/owner-vs-self/)
- [Cap Rate CalculatorCompute capitalization rate from NOI and purchase price.](/calculators/cap-rate/)

## Related terms

- [NOI (Net Operating Income)Income after operating expenses but before debt service, taxes on income, and capital expenditures.](/glossary/noi/)
- [CapEx (Capital expenditures)Large, infrequent replacements (roof, HVAC, water heater), budgeted monthly even though they are paid rarely.](/glossary/capex/)
- [Cash flowWhat remains each month after rent has covered operating expenses and debt service.](/glossary/cash-flow/)
- [50% ruleA rough assumption that operating expenses will consume about half of gross rent, excluding the mortgage.](/glossary/fifty-percent-rule/)

## More in Investing

- [1% rule](/glossary/one-percent-rule/)
- [1031 exchange](/glossary/1031-exchange/)
- [50% rule](/glossary/fifty-percent-rule/)
- [Appreciation](/glossary/appreciation/)
- [CAGR (Compound Annual Growth Rate)](/glossary/cagr/)
- [Cap rate (Capitalization rate)](/glossary/cap-rate/)

## Have a question about your own situation?

Ondo handles brokerage, lending, property management and notary under one roof, so the answer does not change depending on who you ask.

[Talk to Ondo](/contact/)[Browse all terms](/glossary/)