Real Estate Math

A New Mexico rental property has 5 units each renting for $900/month. Annual vacancy is 8%. What is the Effective Gross Income (EGI)?

A$49,680✓ Correct
B$54,000
C$44,280
D$46,800

Explanation

Potential Gross Income = 5 x $900 x 12 = $54,000. Vacancy loss = $54,000 x 8% = $4,320. EGI = $54,000 - $4,320 = $49,680.

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