Real Estate Math
An Iowa investor's property has potential gross income of $120,000, vacancy of 6%, and operating expenses of $40,000. What is the NOI?
A$72,800✓ Correct
B$80,000
C$72,000
D$73,200
Explanation
Effective Gross Income = $120,000 x (1 - 0.06) = $120,000 x 0.94 = $112,800. NOI = $112,800 - $40,000 = $72,800.
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