Property Management
Vacancy and credit loss in income property analysis refers to:
AThe cost of maintaining vacant units
BIncome lost due to vacant units and tenants who fail to pay rent✓ Correct
CLosses due to property value decline
DOperating expenses allocated to unoccupied units
Explanation
Vacancy and credit loss (also called vacancy and collection loss) is an allowance deducted from gross potential income to account for units that are unoccupied and for rents that are uncollectible. It represents the difference between what could be collected and what actually is.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Math Concepts
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