Real Estate Math
A building has 12 apartments, each renting for $1,500/month. Vacancy and collection losses are 5%. What is the effective gross income (EGI) per year?
A$180,000
B$171,000
C$204,600✓ Correct
D$216,000
Explanation
Potential Gross Income = 12 × $1,500 × 12 = $216,000. Vacancy/collection losses = $216,000 × 5% = $10,800.
People Also Study
Related Illinois Questions
- A 20-unit apartment complex has gross rents of $30,000/month. Operating expenses are 45% of effective gross income. Vacancy is 5%. What is the annual NOI?Real Estate Math
- A property has gross rental income of $60,000, vacancy losses of $3,000, and operating expenses of $22,000. What is the net operating income (NOI)?Real Estate Math
- A property has a potential gross income of $90,000 annually. The vacancy rate is 8% and operating expenses are $32,000. What is the net operating income (NOI)?Real Estate Math
- An Illinois commercial property has potential gross income of $120,000, a 5% vacancy allowance, and operating expenses of $38,000. What is the NOI?Real Estate Math
- A property's 'potential gross income' (PGI) in the income approach differs from 'effective gross income' (EGI) because:Property Valuation
- What is 'effective gross income' (EGI) in income property analysis?Property Valuation
Key Terms to Know
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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
Study This Topic
Practice More Illinois Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Illinois Quiz →