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Operating expenses as they relate to real estate are typically the day to day costs necessary to operate the property to the intended use (i.e. real estate taxes, insurance, utilities, repairs and maintenance, etc). Capital expenses are for items that generally have a useful life beyond one year (i.e. cost to replace roof, re-paint exterior, re-pave parking area, etc).

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Q: What is the difference between capital expenses and operating expenses?
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