Real Estate Math
A Massachusetts investor buys a 6-unit building for $900,000. Monthly rent per unit is $1,800. Annual gross income is $129,600. With a 95% occupancy rate, the effective gross income is:
A$122,880
B$129,600
C$123,120✓ Correct
D$116,640
Explanation
Effective Gross Income = Potential Gross Income × Occupancy Rate = $129,600 × 95% = $123,120. The 5% vacancy reduces gross income by $6,480.
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