What type of expenses include insurance and property taxes?

The correct choice is fixed expenses. Fixed expenses represent costs that do not change regardless of the level of activity or occupancy within a property. Insurance and property taxes are examples of fixed expenses because they typically remain consistent over time and are predictable in nature.

Insurance premiums are often established for a set period, and regardless of how much the property is used or rented, those costs remain the same. Similarly, property taxes are assessed based on the value of the property and are billed annually or semi-annually, independent of changes in occupancy or use of the property.

Understanding the distinction between fixed, operating, variable, and contingent expenses is crucial for effective financial management and forecasting in real estate transactions. Operating expenses can fluctuate based on the operational needs of a property, while variable expenses are those that can change depending on factors like usage or occupancy. Contingent expenses typically arise from unforeseen events or conditions. Thus, recognizing insurance and property taxes as fixed expenses helps in creating an accurate budget for property management.