Real Estate Math
A property manager charges a 8% management fee on collected rents. The building collects $18,500 in rent in a given month. What is the management fee?
A$1,480✓ Correct
B$1,500
C$1,550
D$1,400
Explanation
Management fee = Collected Rents × Fee Rate = $18,500 × 0.08 = $1,480. Note that management fees are typically calculated on COLLECTED rents (actual money received), not on gross potential rents. This aligns the manager's incentive with maximizing collections and minimizing vacancies.
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