Question

You are analyzing an investment property. You forecast the effective gross income to be $396,000. The operating expenses for this property, including a $4,400 reserve for replacements, total $176,000. What is the property's net operating income?

Answer 1

Answer:

$220,000

Explanation:

Given:

Effective Gross Income(EGF) : $396,000

Operating Expenses(OE) : $176,000 ( Including $4,400 reserve for replacements)

To Find Net Operating Income(NOI):

NOI = EGF - OE

NOI = $396,000 - $176,000

NOI = $220,000

So the Net Operating Income is $220,000