Real Estate Math

An Alaska investor purchases a fourplex for $600,000. Each unit rents for $1,200/month. The vacancy rate is 8% and annual operating expenses are $28,000. What is the NOI?

A$18,256
B$24,992✓ Correct
C$26,480
D$27,440

Explanation

Annual gross income = 4 units × $1,200 × 12 = $57,600. Vacancy loss = $57,600 × 8% = $4,608. EGI = $57,600 − $4,608 = $52,992. NOI = $52,992 − $28,000 = $24,992. Adjusted answer: NOI = $24,992.

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