Real Estate Math
A building in Anchorage has 12 units, each renting for $1,650/month. Annual operating expenses are $42,000 and vacancy is 6%. What is the NOI?
A$181,344✓ Correct
B$154,800
C$174,360
D$196,800
Explanation
PGI = 12 × $1,650 × 12 = $237,600. Vacancy = $237,600 × 6% = $14,256.
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Key Terms to Know
Net Operating Income (NOI)
The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Math Concepts
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