Real Estate Math

A Vermont commercial property has annual gross rents of $180,000, a vacancy rate of 6%, and operating expenses equal to 35% of effective gross income. What is the NOI?

A$109,980✓ Correct
B$108,000
C$117,000
D$103,320

Explanation

EGI = $180,000 x (1 - 0.06) = $180,000 x 0.94 = $169,200. Operating expenses = 35% x $169,200 = $59,220. NOI = $169,200 - $59,220 = $109,980. Closest: recalculate: $169,200 - $59,220 = $109,980.

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