Real Estate Math
A 20-unit Arizona apartment building has an average monthly rent of $1,100 and an 8% vacancy rate. Annual operating expenses are $85,000. At a 6.5% cap rate, what is the property's value?
A$1,580,000
B$2,428,923✓ Correct
C$1,492,000
D$1,720,000
Explanation
Annual PGI = 20 × $1,100 × 12 = $264,000. EGI = $264,000 × (1 - 0.
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