Real Estate Math
A Rhode Island commercial space is 4,500 sq ft. The annual rent is $28 per sq ft. What is the monthly rent?
A$9,500
B$10,000
C$10,500✓ Correct
D$11,000
Explanation
Annual rent: 4,500 x $28 = $126,000. Monthly rent: $126,000 / 12 = $10,500.
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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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