A rental property has a potential gross income of $60,000, vacancy and collection loss of 8%, and operating expenses of $22,000. What is the Net Operating Income (NOI)?
Why B. $33,200 Is Correct
Answer B: B. $33,200
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.
Key Real Estate Math Terms in This Question
People Also Study
Related Colorado Questions
- An appraiser is valuing a rental property and estimates annual gross income of $60,000 with a vacancy and credit loss of 5% and operating expenses of $20,000. What is the net operating income (NOI)?Property Valuation
- A Colorado commercial property has 10,000 rentable square feet, rented at $18/sq ft/year on a net basis. The vacancy is 8%. What is the effective gross income?Real Estate Math
- A Colorado property generates gross rents of $48,000/year. Vacancy rate is 8% and operating expenses are $15,000. What is the NOI?Real Estate Math
- A Colorado 10-unit apartment building sells for $1,500,000. Annual gross rents are $168,000 with a 5% vacancy rate and operating expenses of $60,000. What is the cap rate at the sale price?Real Estate Math
- A Colorado property has a 5% vacancy rate and potential gross income of $96,000. What is the effective gross income?Real Estate Math
- A Colorado buyer's PITI payment is $2,400/month. Their gross monthly income is $7,500. What is their front-end (housing) DTI ratio?Finance
- The gross rent multiplier (GRM) for a small residential rental property in Colorado is calculated as:Property Valuation
- A Colorado borrower's monthly gross income is $6,000. Their total monthly debt obligations including PITI are $2,400. What is their total DTI ratio?Finance
Key Terms to Know
The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
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.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Math Concepts
Study This Topic
Practice More Colorado Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Colorado Quiz →