What would be the net operating income (NOI) for a residential income property with total expenses of $105,000 and an effective gross income of $170,000?

What would be the net operating income (NOI) for a residential income property with total expenses of $105,000 and an effective gross income of $170,000?

• A. $65,000
• B. $75,000
• C. $85,000
• D. $95,000

Answer: (A)

To find the net operating income (NOI) for a residential income property, you subtract the total expenses from the effective gross income. In this case, effective gross income is $170,000, and total expenses are $105,000. The formula is: NOI = Effective Gross Income - Total Expenses Applying the figures: NOI = $170,000 - $105,000 NOI = $65,000 Thus, the correct calculation indicates that the net operating income is indeed $65,000. This result reflects the amount of income generated by the property after accounting for all operating expenses, providing a clear picture of the property's financial performance. Understanding this calculation is crucial for investors and appraisers as it helps evaluate the income-generating potential of real estate assets.

To find the net operating income (NOI) for a residential income property, you subtract the total expenses from the effective gross income. In this case, effective gross income is $170,000, and total expenses are $105,000.

The formula is:

NOI = Effective Gross Income - Total Expenses

Applying the figures:

NOI = $170,000 - $105,000

NOI = $65,000

Thus, the correct calculation indicates that the net operating income is indeed $65,000. This result reflects the amount of income generated by the property after accounting for all operating expenses, providing a clear picture of the property's financial performance. Understanding this calculation is crucial for investors and appraisers as it helps evaluate the income-generating potential of real estate assets.