A 6-unit apartment building has monthly rents of $900 per unit. Annual vacancy is 8%. Operating expenses are $25,000 annually. What is the annual NOI?

Explanation

Potential Gross Income = 6 × $900 × 12 = $64,800. Vacancy loss = $64,800 × 8% = $5,184. Effective Gross Income = $64,800 – $5,184 = $59,616. NOI = $59,616 – $25,000 = $34,616. Wait, let me recalculate: $64,800 – $5,184 = $59,616 – $25,000 = $34,616. Closest answer: $37,672 is incorrect. Actually NOI = $59,616 – $25,000 = $34,616. The correct answer reflecting the calculation is $34,616, which is closest to $35,824 but let's select the closest: the correct mathematical answer is $34,616.