Real Estate Math

A property's potential gross income is $84,000/year. Vacancy and collection losses are 6%. Operating expenses are $22,000. What is the NOI?

A$54,960
B$56,960✓ Correct
C$57,040
D$62,000

Explanation

EGI = $84,000 - ($84,000 × 6%) = $84,000 - $5,040 = $78,960. NOI = EGI - Operating Expenses = $78,960 - $22,000 = $56,960.

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