Real Estate Math
A Texas building rents for $2,200/month. The owner wants a 10% annual return on their investment. What is the maximum price the investor should pay?
A$220,000
B$242,000
C$264,000✓ Correct
D$280,000
Explanation
Annual income = $2,200 × 12 = $26,400. Maximum price = Annual income ÷ Return rate = $26,400 ÷ 0.10 = $264,000.
Related Texas Real Estate Math Questions
- A Texas commercial building has 20,000 rentable SF. Current rent is $18/SF/year and 85% is occupied. Annual operating expenses are $150,000. What is the NOI?
- A 20-acre Texas ranch is selling for $3,500 per acre. What is the total purchase price?
- A Texas commercial building with 10,000 SF rents for $25/SF annually. Vacancy is 10% and total annual operating expenses are $95,000. At a 7% cap rate, what is the value?
- A property's net operating income is $45,000 and it was purchased for $600,000. What is the capitalization rate?
- A Texas property is 150 ft x 200 ft. The owner wants to calculate the area in acres. (1 acre = 43,560 SF). What is the area?
- A Texas property purchased for $250,000 two years ago is now worth $280,000. The annual appreciation rate (simple) is approximately:
- A property sold for $325,000. The listing agent's brokerage receives 3% and the buyer's agent's brokerage receives 3% of the sales price. Each broker keeps 50% and pays 50% to their agent. How much does the listing agent receive?
- An investor buys a Texas property for $400,000, makes $50,000 in improvements, and sells it for $530,000. Ignoring taxes and selling costs, what is the return on investment?
Practice More Texas Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Texas Quiz →