Real Estate Math

An apartment building with 8 units rents each at $750/month. The expense ratio is 45% of EGI and vacancy is 7%. What is the NOI?

A$36,828✓ Correct
B$31,680
C$27,000
D$33,000

Explanation

Gross potential income = 8 × $750 × 12 = $72,000. Vacancy = $72,000 × 7% = $5,040. EGI = $72,000 − $5,040 = $66,960. Operating expenses = $66,960 × 45% = $30,132. NOI = $66,960 − $30,132 = $36,828. The answer choices may reflect a different expense base. NOI = $36,828.

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