What is the key characteristic of variable expenses?

Variable expenses are defined by their nature of changing in relation to certain factors, primarily occupancy levels in the context of real estate. This means that as occupancy rates increase or decrease, these expenses will rise and fall accordingly. For instance, in a rental property, variable expenses might include utilities, maintenance, and supplies, which tend to increase when more units are occupied or when the property is used more intensively.

In contrast, the other characteristics highlight aspects of fixed expenses or suggest unpredictability that does not align with the definition of variable expenses. Fixed expenses, as implied in some of the incorrect options, remain consistent over time and do not change based on occupancy, while variable expenses are dynamic and contingent on fluctuating occupancy levels or usage rates. Additionally, variable expenses do not inherently hold a relationship of being higher than fixed expenses; their amounts can vary widely depending on various operational factors, making it essential to regard them as separate from the predictable and unchanging nature of fixed expenses.