Direct answer
What does Operating budget mean?
A plan of expected property income and operating expenses for a future period.
Exam cue: Compare budgeted figures with actual results and keep capital items separate when the accounting system requires it.
What does it look like in a question?
New York example
A manager projects rent collections, maintenance, utilities, insurance and management costs for the year.
Common exam trap
What should you not confuse it with?
An operating budget is not a property valuation or a cash reserve itself.
Related property management terms
Capital improvementA significant addition or replacement that extends useful life, increases value or adapts property to a new use, depending on the accounting and tax context.EvictionA legal process used to recover possession from a tenant under applicable grounds and court procedures.Management agreementA contract authorizing a property manager to perform stated services for an owner.Preventive maintenancePlanned inspection and service intended to reduce breakdowns, hazards and more costly repairs.Reserve fundMoney set aside for future major repairs, replacements, emergencies or other planned property needs.Security depositMoney held to secure a tenant's performance under a lease and governed by the applicable lease and law.
Sources used1 reference with section locators
The curriculum citation confirms exam scope. Definition and rule citations support the explanation itself. Links and locators were checked on August 26, 2026.
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Put the term back into its full subject.
A definition helps with recall. The subject guide shows how the rule interacts with documents, scenarios, calculations and practice questions.