Property Valuation
A West Virginia commercial property's 'net operating income' (NOI) is calculated as:
AGross potential income minus debt service
BEffective gross income minus all operating expenses (excluding debt service and depreciation)✓ Correct
CGross potential income minus all expenses including mortgage payments
DTotal revenue minus taxes and insurance only
Explanation
NOI = Effective gross income - All operating expenses (excluding debt service and income taxes). Operating expenses include management fees, maintenance, insurance, property taxes, utilities, and reserves for replacement.
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