Final answer:
Mortgage payments are not considered an operating expense but are rather financing expenses related to real estate investment.
Step-by-step explanation:
The expense that is not an operating expense associated with a direct real estate investment is c) mortgage payments. Operating expenses for real estate include costs necessary for the day-to-day functioning and maintenance of a property. These expenses typically encompass utility payments, the reserve for repairs, and management fees. However, mortgage payments are considered a financing expense, as they are related to the borrowing of capital to acquire the property and not to the operating activities related to managing or maintaining it.
Operating expenses associated with a direct real estate investment are the costs incurred in managing and maintaining the property. They include expenses like utility payments, reserve for repairs, and management fees. However, mortgage payments are not considered operating expenses. Mortgage payments are the monthly payments made to the lender to repay the loan used to purchase the property, and they are not directly related to the day-to-day management of the property.