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)?

Q: 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)?

EGI = $90,000 × (1 − 0.08) = $90,000 × 0.92 = $82,800. NOI = $82,800 − $32,000 = $50,800. To solve this, multiply the relevant values: $90,000 and $32,000 at 8%.. The correct answer is $50,800.. This is a common calculation on the Illinois real estate exam.

A$48,800

B$50,800✓ Correct

C$51,200

D$58,000

Explanation

EGI = $90,000 × (1 − 0.08) = $90,000 × 0.

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