Certified Apartment Portfolio Supervisor (CAPS) Practice Exam - Module 2

Which of the following is considered an anticipated expense in budget projections?

1. Market research costs

2. Payroll

3. Tenant satisfaction expenses

4. Decorative landscaping costs

The correct answer is: Payroll

Anticipated expenses in budget projections are typically recurring costs that are necessary for the operation of the property. Payroll is a key element because it represents the salaries and wages paid to employees who manage, maintain, and service the property. This type of expense is not only predictable but also essential for ensuring that staff is available to meet the needs of the residents and manage the property effectively. In contrast, other choices may not consistently recur or can vary significantly from period to period. For example, market research costs may only occur once or at irregular intervals as needed, and tenant satisfaction expenses can be influenced by various factors, making them less predictable. Decorative landscaping costs might also vary based on seasonal needs or specific projects, meaning they are not necessarily anticipated as a regular expense. Therefore, payroll stands out as the most reliable and expected cost in the budgeting process for a property.