Real Estate MathIntermediateDelaware Exam

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)?

Q: 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)?

Effective Gross Income = $72,000 × (1 − 0.05) = $68,400. NOI = EGI − Operating Expenses = $68,400 − $28,000 = $40,400.

A$40,400Correct

B$44,000

C$40,000

D$36,400

Why $40,400 Is Correct

Answer A: $40,400

Effective Gross Income = $72,000 × (1 − 0.05) = $68,400.

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

Net Operating Income (NOI)

The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.

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