Real Estate Math
A rental property has 8 units, each renting at $875/month. The property has a 4% vacancy rate. Annual expenses are $32,400. What is the NOI?
A$48,240✓ Correct
B$51,600
C$72,400
D$67,200
Explanation
Gross Potential Income = 8 × $875 × 12 = $84,000. Vacancy loss = $84,000 × 4% = $3,360. EGI = $84,000 − $3,360 = $80,640. NOI = $80,640 − $32,400 = $48,240.96 = $80,640 − $32,400 = $48,240. Best answer given options: $68,520.
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