Real Estate MathIntermediateCalifornia Exam

A property management company charges 8% of collected rents. The monthly rent roll is $28,500 and vacancy is 10%. What is the monthly management fee?

Q: A property management company charges 8% of collected rents. The monthly rent roll is $28,500 and vacancy is 10%. What is the monthly management fee?

Collected rent = $28,500 × (1 − 0.10) = $25,650. Management fee = $25,650 × 0.08 = $2,052. To solve this, multiply the relevant values: $28,500 at 8%.. The correct answer is $2,052.. This is a common calculation on the California real estate exam.

A$2,280

B$2,052Correct

C$228

D$205.20

Why $2,052 Is Correct

Answer B: $2,052

Collected rent = $28,500 × (1 − 0.10) = $25,650.

Exam Tip: Real Estate Math

Math questions are formula-based. Memorize the key formulas: commission splits, proration, cap rate (NOI ÷ Value), GRM (Price ÷ Gross Rent), and LTV (Loan ÷ Value). Practice converting between annual and monthly figures.

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Amortization

The 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.

Debt-to-Income Ratio (DTI)

A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.

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