Real Estate Math

An investor purchases a duplex for $280,000. Each unit rents for $1,100/month. Annual operating expenses are $8,400. What is the annual net operating income (NOI) and cap rate?

ANOI: $17,940; Cap rate: 5.4%
BNOI: $18,000; Cap rate: 6.4%✓ Correct
CNOI: $26,400; Cap rate: 9.4%
DNOI: $18,000; Cap rate: 9.0%

Explanation

Gross annual income: 2 units × $1,100/month × 12 months = $26,400. NOI = $26,400 − $8,400 = $18,000.

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