An owner of a six-family apartment complex pays the property manager an annual salary equal to 6% of the property's annual gross income. If the annual gross income is $700,000, the annual expenses are $325,000 and the capitalization rate is 10%, what is the property manager's annual salary?

Question

Lorelei

Business

16 September, 20:35

An owner of a six-family apartment complex pays the property manager an annual salary equal to 6% of the property's annual gross income. If the annual gross income is $700,000, the annual expenses are $325,000 and the capitalization rate is 10%, what is the property manager's annual salary?

+4

Answers (1)

Know the Answer?

Chris Cruz · Answer 1

The property manager's annual salary is $42,000

Explanation:

In the question, it is mentioned that the property manager salary equals to the 6% if the property annual gross income, and the property annual gross income is $700,000

So, the property manager salary equals to

= Property annual gross income * 6%

= $700,000 * 6%

= $42,000

The annual expenses and capitalization rate is irrelevant. Thus, it is ignored in the computation part.

Hence, the property manager's annual salary is $42,000