Real Estate Math

A Florida apartment complex has 24 units renting at $1,350/month. Annual vacancy loss is 5%. Annual operating expenses are $72,000. If the cap rate is 8%, what is the value?

A$3,510,000
B$3,645,000
C$3,717,000✓ Correct
D$3,098,250

Explanation

Annual PGI = 24 × $1,350 × 12 = $388,800. Vacancy = $388,800 × 5% = $19,440.

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