Property Valuation
A Louisiana appraiser is valuing a property using the income approach. If the property's potential gross income is $120,000, vacancy and collection loss is $9,600, and operating expenses are $42,000, what is the NOI?
A$68,400✓ Correct
B$62,400
C$72,000
D$78,000
Explanation
EGI = $120,000 − $9,600 = $110,400. NOI = EGI − Operating Expenses = $110,400 − $42,000 = $68,400. Using the values given ($120,000,, $9,600,), apply the appropriate formula.. The correct answer is $68,400.. This is a common calculation on the Louisiana real estate exam.
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