Real Estate Math
A Michigan property has annual gross rents of $60,000, a vacancy rate of 5%, and annual operating expenses of $18,000. What is the NOI?
A$39,000✓ Correct
B$42,000
C$38,000
D$45,000
Explanation
EGI = $60,000 − ($60,000 × 5%) = $60,000 − $3,000 = $57,000. NOI = $57,000 − $18,000 = $39,000. To solve this, multiply the relevant values: $60,000, and $18,000 at 5%.. The correct answer is $39,000.. This is a common calculation on the Michigan real estate exam.
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