Property Management
What does 'net operating income' (NOI) represent for a managed property?
AThe property's market value
BIncome from operations after deducting operating expenses but before debt service and income taxes✓ Correct
CThe total rent collected each month
DThe owner's take-home income after all expenses including mortgage
Explanation
NOI is calculated as effective gross income minus operating expenses (management fees, taxes, insurance, maintenance, utilities). It is calculated before mortgage payments (debt service) and income taxes.
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