Property Valuation
An appraiser in South Dakota is valuing a property using the income approach. If the property's effective gross income is $60,000 and operating expenses are $25,000, what is the NOI?
A$25,000
B$35,000✓ Correct
C$60,000
D$85,000
Explanation
Net Operating Income (NOI) = Effective Gross Income - Operating Expenses = $60,000 - $25,000 = $35,000. Note: NOI is calculated before debt service (mortgage payments) but after all operating expenses.
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