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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?

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  1. 16 September, 20:46
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    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
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