What does operating costs include in determining net operating income?

Operating costs play a crucial role in calculating net operating income (NOI) as they encompass a comprehensive range of expenses incurred in managing and maintaining a property. By selecting all expenses associated with managing the property, this option acknowledges that NOI is derived from the total income generated by the property after deducting all operating expenses necessary to keep the property running.

These operating costs can include various expenses, such as property management fees, maintenance and repairs, utilities, marketing costs, insurance, and other ongoing expenses involved in the day-to-day operation of the property. This complete picture ensures that the calculated NOI accurately reflects the property's profitability by considering all financial responsibilities that come with property management.

The other choices would limit the scope of what operational costs entail, thus not providing an accurate representation of the overall expenses that should be considered when determining net operating income.