Property Valuation
A Minnesota rental property has potential gross income of $96,000, vacancy and credit loss of 5%, and operating expenses of $32,000. What is the NOI?
A$59,200✓ Correct
B$64,000
C$60,200
D$59,800
Explanation
Effective gross income = $96,000 × (1 - 0.05) = $91,200. NOI = $91,200 - $32,000 = $59,200. To solve this, multiply the relevant values: $96,000, and $32,000 at 5%.. The correct answer is $59,200.. This is a common calculation on the Minnesota real estate exam.
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