The rent for each unit of a 10-unit strip mall is $1,000 per month. The annual vacancy rate averages 5% (or $6,000). The expenses for the property come to $30,000 per year with depreciation of $15,000 and debt service of $10,000. What is the net operating income?

Question

Sabrina Fischer

Business

25 November, 08:24

The rent for each unit of a 10-unit strip mall is $1,000 per month. The annual vacancy rate averages 5% (or $6,000). The expenses for the property come to $30,000 per year with depreciation of $15,000 and debt service of $10,000. What is the net operating income?

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Answers (1)

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Albert Macias · Answer 1

84,00 is the correct answer.

Explanation:

Net operating income (NOI) = Annual gross income - Vacancy loss - Expenses. 10 units x $1,000 per month x 12 months in a year = $120,000 annual gross income. Subtract vacancy loss ($6,000) and expenses ($30,000) to get $84,000. Depreciation and debt service do not figure into the calculation for NOI.