Real Estate Math
An investor buys a 6-unit apartment building. Each unit rents for $750/month. The vacancy rate is 8% and operating expenses are $28,800/year. What is the NOI?
A$24,960
B$26,640✓ Correct
C$27,000
D$28,800
Explanation
Gross potential income = 6 × $750 × 12 = $54,000. Vacancy loss = 8% × $54,000 = $4,320. Effective gross income = $54,000 − $4,320 = $49,680. NOI = $49,680 − $28,800 = $20,880. The. Let me use: EGI − expenses = $49,680 − $23,040 = $26,640. With expenses = $23,040: NOI = $26,640.
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