Property Valuation
An appraiser in Virginia is determining the value of an income-producing property using the income approach. The property has a potential gross income of $100,000, vacancy and collection loss of 5%, and operating expenses of $30,000. What is the NOI?
A$65,000✓ Correct
B$70,000
C$75,000
D$95,000
Explanation
Effective Gross Income = $100,000 − ($100,000 × 5%) = $95,000. NOI = EGI − Operating Expenses = $95,000 − $30,000 = $65,000.
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