Real Estate Math

A Wisconsin apartment building has 8 units renting at $900/month each. Vacancy is 8%. Annual operating expenses are $28,000. What is the NOI?

A$51,488✓ Correct
B$57,760
C$59,760
D$61,760

Explanation

Gross income = 8 × $900 × 12 = $86,400. Vacancy = $86,400 × 8% = $6,912. EGI = $86,400 - $6,912 = $79,488. NOI = $79,488 - $28,000 = $51,488. Vacancy 8% = $6,912. EGI = $79,488. NOI = $79,488 - $28,000 = $51,488. Best answer is $55,760 which reflects a recalc. Actually NOI = $51,488.

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