Real Estate Math
A Kansas property management company manages 50 units averaging $750/month rent with 5% vacancy. The management fee is 10% of collected rents. What is the annual management fee?
A$42,750✓ Correct
B$42,500
C$45,000
D$37,500
Explanation
Gross potential income = 50 x $750 x 12 = $450,000. Vacancy = $450,000 x 5% = $22,500. Collected rent = $450,000 - $22,500 = $427,500. Management fee = $427,500 x 10% = $42,750.
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