Real Estate Math

A 40-unit apartment complex in Anchorage has units renting at $1,800/month. A new property manager reduces vacancy from 10% to 5%. How much additional annual income does this generate?

A$21,600
B$36,000
C$43,200✓ Correct
D$86,400

Explanation

Annual PGI = 40 × $1,800 × 12 = $864,000. Old vacancy (10%) = $86,400. New vacancy (5%) = $43,200. Additional income = $86,400 − $43,200 = $43,200.

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