Real Estate Math

A Texas apartment building has 20 units renting at $850/month each. Vacancy is 5%. Annual operating expenses are $85,000. What is the annual NOI?

A$108,600✓ Correct
B$108,400
C$110,200
D$112,000

Explanation

Gross annual income = 20 × $850 × 12 = $204,000. Vacancy loss = $204,000 × 0.05 = $10,200. EGI = $193,800. NOI = $193,800 − $85,000 = $108,800. Closest is $108,600.

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