Real Estate Math
A Massachusetts property has potential gross income of $120,000, vacancy of 5%, and operating expenses of $42,000. What is the NOI?
A$72,000✓ Correct
B$78,000
C$114,000
D$61,200
Explanation
EGI = $120,000 × (1 − 0.05) = $120,000 × 0.95 = $114,000. NOI = $114,000 − $42,000 = $72,000. To solve this, multiply the relevant values: $120,000, and $42,000 at 5%.. The correct answer is $72,000.. This is a common calculation on the Massachusetts real estate exam.
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