Real Estate Math
An investor wants to determine the break-even occupancy rate for a property. Annual debt service is $48,000, operating expenses are $24,000, and gross potential income is $96,000. What is the break-even occupancy rate?
A50%
B62.5%
C75%✓ Correct
D80%
Explanation
Break-even occupancy = (Debt service + Operating expenses) ÷ Gross potential income = ($48,000 + $24,000) ÷ $96,000 = $72,000 ÷ $96,000 = 75%.
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