Real Estate Math

A property has a gross potential income of $60,000. The vacancy rate is 5% and operating expenses are $18,000. What is the NOI?

A$37,000
B$39,000✓ Correct
C$41,000
D$42,000

Explanation

Effective Gross Income = $60,000 - ($60,000 x 5%) = $60,000 - $3,000 = $57,000. NOI = $57,000 - $18,000 = $39,000.

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