What is a 'net operating income' (NOI) and how is it used in Delaware property management?
Why Effective Gross Income minus all operating expenses (excluding debt service and income taxes) Is Correct
Answer B: Effective Gross Income minus all operating expenses (excluding debt service and income taxes)
Exam Tip: Property Management
Property management questions cover landlord-tenant law, security deposits, and maintenance responsibilities. Know the differences between gross, net, and percentage leases.
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Key Terms to Know
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
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.
Math Concepts
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