Real Estate Math
An investor purchases a 6-unit apartment building. Each unit rents for $1,500/month. The vacancy and credit loss rate is 5%. What is the effective gross income per year?
A$97,200
B$102,600✓ Correct
C$108,000
D$110,000
Explanation
Potential gross income = 6 units x $1,500 x 12 = $108,000. Vacancy/credit loss = $108,000 x 5% = $5,400.
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