Real Estate Math
A broker charges 1.5% for property management of a 10-unit building. Each unit rents for $1,250/month. What is the broker's annual management fee?
A$2,250✓ Correct
B$2,500
C$2,100
D$2,375
Explanation
Annual rent: 10 × $1,250 × 12 = $150,000. Management fee: $150,000 × 0.
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Key Terms to Know
Gross Rent Multiplier (GRM)
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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