Real Estate Math
A Wisconsin leased commercial space is 4,500 sq ft at $18/sq ft annually. What is the monthly rent?
A$5,500
B$6,750✓ Correct
C$7,000
D$8,100
Explanation
Annual rent = 4,500 × $18 = $81,000. Monthly rent = $81,000 / 12 = $6,750.
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Key Terms to Know
Gross Rent Multiplier (GRM)
A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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