Real Estate Math
A Pennsylvania income property has a potential gross income of $90,000, a 5% vacancy rate, and $30,000 in operating expenses. What is the net operating income (NOI)?
A$55,500✓ Correct
B$56,500
C$60,000
D$85,500
Explanation
Effective Gross Income = $90,000 × (1 − 0.05) = $85,500. NOI = EGI − Operating Expenses = $85,500 − $30,000 = $55,500. NOI is the foundation of the income capitalization approach and is calculated BEFORE debt service (mortgage payments).
Related Pennsylvania Real Estate Math Questions
- A Pennsylvania seller received a net of $198,000 from a sale after paying the 3% listing commission, 3% buyer-agent commission, and $3,500 in other closing costs. What was the sale price?
- A Pennsylvania property has a potential gross income of $120,000, a 5% vacancy rate, and operating expenses of $48,000. What is the operating expense ratio?
- A Pennsylvania property has a gross rent multiplier (GRM) of 120. Monthly gross rent is $2,500. What is the estimated property value?
- A property owner paid $280,000 for a home 5 years ago. It is now appraised at $336,000. What percentage did the property appreciate?
- A commercial property generates gross rental income of $120,000 annually. Operating expenses total $48,000. What is the net operating income?
- A Pennsylvania property was purchased for $180,000 and sold five years later for $225,000. What was the percentage appreciation?
- A Pennsylvania rental property has a purchase price of $250,000 and generates $22,500 annual gross rent. What is the GRM (using annual rent)?
- Depreciation in the cost approach on a 20-year-old building with a 50-year economic life using straight-line method is:
Practice More Pennsylvania Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Pennsylvania Quiz →