Real Estate Math
A Delaware apartment building has 12 units. Eight units rent for $950/month and four units rent for $1,100/month. What is the annual potential gross income (PGI)?
A$100,000
B$106,000
C$134,400✓ Correct
D$118,200
Explanation
Monthly PGI = (8 × $950) + (4 × $1,100) = $7,600 + $4,400 = $12,000. Annual PGI = $12,000 × 12 = $144,000.
People Also Study
Related Delaware Questions
- Delaware real estate license law requires that the employing broker maintain how many years of transaction records?Delaware License Law
- A Delaware borrower's gross monthly income is $5,000. Using a 28% front-end ratio, what is the maximum monthly PITI payment the borrower qualifies for?Finance
- A Delaware property has a potential gross income of $72,000, a vacancy rate of 5%, and annual operating expenses of $28,000. What is the net operating income (NOI)?Real Estate Math
- A Delaware commercial building has 10,000 sq ft of rentable space. The annual rent is $18 per sq ft. What is the annual gross rental income?Real Estate Math
- A building in Delaware has 20 apartment units renting at $1,100/month each. Annual vacancy is 6%. Annual operating expenses are $85,000. What is the NOI?Real Estate Math
- A Delaware apartment building has 8 units renting at $950/month. The building sold for $912,000. What is the gross rent multiplier (GRM)?Real Estate Math
- A Delaware buyer's gross monthly income is $7,500. Using a 43% back-end (total debt) ratio, what is the maximum total monthly debt (including housing)?Real Estate Math
- A property generates monthly gross rent of $2,400. Using a GRM of 110, what is the estimated property value?Real Estate Math
Key Terms to Know
Gross Rent Multiplier (GRM)
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Study This Topic
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →