Real Estate Math
A property's potential gross income is $60,000 per year. The vacancy rate is 5% and operating expenses are $20,000. What is the net operating income?
A$36,000
B$37,000✓ Correct
C$38,000
D$40,000
Explanation
EGI = $60,000 − ($60,000 × 0.05) = $60,000 − $3,000 = $57,000. NOI = $57,000 − $20,000 = $37,000. To solve this, multiply the relevant values: $60,000 and $20,000 at 5%.. The correct answer is $37,000.. This is a common calculation on the Nebraska real estate exam.
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