Real Estate Math
A Michigan triplex generates $900/month per unit. Annual operating expenses total $12,000. What is the NOI?
A$20,400✓ Correct
B$32,400
C$21,600
D$24,400
Explanation
Annual gross rent = 3 units x $900 x 12 = $32,400. NOI = $32,400 - $12,000 = $20,400.
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Key Terms to Know
Net Operating Income (NOI)
The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
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