What is the limits set for operating expenses typically based on?

Operating expenses are typically set based on monthly considerations because they reflect the ongoing costs associated with the operation of a property or business on a regular basis. This approach allows for a detailed and timely understanding of cash flow, budget management, and expense tracking. Setting limits on operating expenses using monthly data ensures that financial planning aligns with short-term performance and operational needs, and enables more effective decision-making regarding budgets and resource allocation.

This method of monthly review is practical since it provides a responsive framework to adjust forecasts and strategies regularly based on actual performance, market conditions, and other fluctuating factors, ultimately supporting better financial health for the organization or property. The use of monthly considerations also allows stakeholders to spot trends over time and make informed adjustments as needed, rather than relying solely on broader, less frequent data from annual reports or market forecasts.