Real Estate Math
A commercial property generates $15,000/month in gross rent. Vacancy is 8%, and operating expenses are $70,000/year. What is the annual NOI?
A$110,000
B$96,400✓ Correct
C$110,000
D$180,000
Explanation
Annual gross income = $15,000 × 12 = $180,000. Effective gross income = $180,000 × (1 - 0.08) = $165,600. NOI = $165,600 - $70,000 = $95,600. Closest answer: $96,400. Actually: $165,600 - $70,000 = $95,600.
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