This office lease form is a clause regarding all direct and indirect costs incurred by the landlord in the operation, maintenance, repair, overhaul, and any owner's overhead in connection with the project.
Georgia Clause Defining Operating Expenses
Category:
State:
Multi-State
Control #:
US-OL19034B
Format:
Word;
PDF
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How to fill out Clause Defining Operating Expenses?
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FAQ
Operating expenses include rent, equipment, inventory costs, marketing, payroll, insurance, step costs, and funds allocated for research and development. By contrast, a non-operating expense is an expense incurred by a business that is unrelated to the business's core operations.
An operating expense clause lets your landlord recover normal out-of-pocket costs of running a building. That should be all it does.
OER is used for comparing the expenses of similar properties. An investor should look for red flags, such as higher maintenance expenses, operating income, or utilities that may deter him from purchasing a specific property. The ideal OER is between 60% and 80% (although the lower it is, the better).
Operating income is what is left over after a company subtracts the cost of goods sold (COGS) and other operating expenses from the sales revenues it receives. However, it does not take into consideration taxes, interest or financing charges.
The primary difference between an operating and administrative expense is that types of operating expenses are related to the departments that produce products and services whereas administrative expenses are more general and not necessarily specific to a department within the company.
Operating costs are the expenses incurred by a business that it uses to conduct its operations. These expenses may include payroll, rent, insurance premiums, utilities, and equipment maintenance. Operating costs do not include capital expenditures or depreciation.
Common operating expenses for a company include rent, payroll, travel, utilities, insurance, maintenance and repairs, property taxes, office supplies, depreciation and advertising.
Examples of valid operating costs include property taxes, property insurance, maintenance, utilities, landscaping (which includes snow removal) and garbage collection. Valid operating costs will benefit all of the tenants in a commercial property?not just one or two.
