Which of the following constitutes a common example of Debt Service?

The correct choice highlights mortgage payments as a prime example of debt service. Debt service refers to the cash required to cover the repayment of interest and principal on a debt, particularly in the context of borrowing money to purchase property. In real estate, this typically manifests as the periodic payments made to a lender for a mortgage. These payments consist of both principal and interest components, reflecting the financial obligation a property owner has to fulfill their mortgage agreement.

Understanding debt service is crucial for investors and property owners, as it directly impacts cash flow and overall financial strategy. Maintaining a clear grasp of mortgage payments ensures that one can adequately manage expenses related to owning and operating real estate, leading to informed decision-making in property investment and management.

While monthly operating expenses, utility payments, and property taxes are essential costs associated with property ownership, they do not fall under the category of debt service. Instead, they represent routine operational costs, while debt service specifically pertains to the repayment of borrowed funds.