Business Glossary

amounts to pay the costs of acquiring real estate, such as interest on all loans, ground rent for leased land. Loan principal payments reduce the debt, so technically they are not expenses. Contrast operating expenses .

Example: Florence owns both units of a duplex, each financed with a separate mortgage. She lives in one unit and rents the other. From the $2,000 monthly rent received from her tenant, Florence has to pay financing expenses (interest on both mortgages) and operating expenses.