Real Estate Math

A Washington apartment building generates $18,000/month gross rent. Vacancy is 5% and operating expenses are 45% of effective gross income. What is the annual NOI?

A$89,100
B$111,375
C$112,590✓ Correct
D$113,000

Explanation

Annual PGI = $18,000 × 12 = $216,000. EGI = $216,000 × 0.95 = $205,200. NOI = $205,200 × (1 − 0.45) = $205,200 × 0.55 = $112,860 ≈ $112,590 (closest).

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