Real Estate Math

A duplex rents each unit for $875 per month. Annual operating expenses are $7,200. Using a 10% vacancy rate, what is the annual NOI?

A$11,700✓ Correct
B$14,700
C$12,600
D$15,300

Explanation

Potential gross income = 2 × $875 × 12 = $21,000. Effective gross income = $21,000 × 90% = $18,900.

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