*Math Test*

Questions and Answers

What is the annual rent if the gross income is $154,000 with a rental agreement calling for 3% of gross sales?

$4,800 (correct)

$100,000

$36,000

$4,620

What is the monthly rent for an office space measuring 70’ x 40’ at $8.25 per square foot?

$2,800

$1,900

$1,925 (correct)

$23,100

What is the monthly management fee on a space 50’ x 40’ at $8 per square foot (per year), if the commission is 10%?

$16,000

$133.33 (correct)

$1,333.3

$1,600 (correct)

$3,000 x 12 = $36,000 $36,000 ÷ 5,000 = $7.20

$7.20 Signup and view all the answers

The rent on a six-plex is $600 per unit. What is the effective gross income (EGI) if you have two vacancies?

$2,400 Signup and view all the answers

What is the Effective Gross Income (EGI) for a property with 50 units renting for $400 each, considering a 10% vacancy rate?

$27,000 Signup and view all the answers

What is the effective gross income (EGI) on an apartment building that has 60 units renting for $500 per unit? The vacancy rate is 10%.

$27,000 Signup and view all the answers

What is the EGI on a building with 100 apartments renting at $400/unit? At present, there are 25 vacant units.

$2,260 Signup and view all the answers

What is the total annual rent for a building where the monthly rent is $0.10 per square foot and the size of the rentable space is 4,500 square feet?

$5,400 Signup and view all the answers

What is the prorated rent for a tenant who moves in on the 20th of a month, with a monthly rent of $600?

$220 Signup and view all the answers

What is the effective gross rent per month if the annual rent is $10,000 and the first six months are rent-free over a five-year lease?

$750 Signup and view all the answers

What is the monthly rent per square foot for an apartment building with 10 units, each measuring 800 square feet and renting for $650 per month?

$0.81 Signup and view all the answers

What is the monthly rent for a building measuring 50’ x 75’ if the annual rent is $18,400?

$1,533.33 Signup and view all the answers

What is the vacancy rate of a single-family home rented for 11 out of 12 months?

8.33% Signup and view all the answers

What is the vacancy rate of an apartment building that has 10 units and during the year 3 units are vacant for 2 months each?

5% Signup and view all the answers

You are managing a 100 unit apartment complex and your cost of doing business to manage these units is $15,000. What would your fee and markup have to be per unit to maintain a 10% profit?

$16.67 Signup and view all the answers

You are managing a four-plex and each unit rents for $500/mo. The operating cost for the year is $6,000. What is the distribution you will send the owner at the end of the month?

$1,500 Signup and view all the answers

You are managing 600 units and want to make 23% profit. Your expenses are $40,000 straight & indirect are $10,000. What fee per unit must you charge?

$108.22 Signup and view all the answers

The rent is $350 on a 70 unit complex. There is no vacancy. The property manager increases all rents by 10%. After the increase, 10% of the units go vacant. What is the gross income after the rent increase?

$24,500 Signup and view all the answers

If the Gross Potential Income (GPI) is $200,000 and the Effective Gross Income is $188,000, what is the monthly vacancy loss over the course of one year?

$1,000 Signup and view all the answers

Study Notes

Rental Agreements and Calculations

Annual rent based on a percentage of gross sales: 3% of gross sales or a minimum of $400/month, whichever is higher.
For 2012, gross income of $154,000 results in:
- 3% calculation: 154,000x0.03=154,000 x 0.03 = 154,000x0.03=4,620
- Monthly minimum calculation: 400x12=400 x 12 = 400x12=4,800
- Therefore, annual rent = 4,800sinceit′sgreaterthan4,800 since it's greater than 4,800sinceit′sgreaterthan4,620.

Office Space Rent Calculation

Dimensions of office space: 70’ x 40’ results in:
- Square footage: 70 x 40 = 2,800 SF
- Annual rent at 8.25/SF:2,800SFx8.25/SF: 2,800 SF x 8.25/SF:2,800SFx8.25 = $23,100
- Monthly rent: 23,100÷12=23,100 ÷ 12 = 23,100÷12=1,925

Monthly Management Fee Calculation

Dimensions of management space: 50’ x 40’ results in:
- Square footage: 50 x 40 = 2,000 SF
- Annual management rent calculation: 2,000 SF x 8/SF=8/SF = 8/SF=16,000
- Management commission at 10%: 16,000x0.10=16,000 x 0.10 = 16,000x0.10=1,600
- Monthly management fee: 1,600÷12=1,600 ÷ 12 = 1,600÷12=133.33

Annual Rent Per Square Foot Calculation

Building size: 5,000 SF with a monthly rent of $3,000 results in:
- Annual rent: 3,000x12=3,000 x 12 = 3,000x12=36,000
- Rent per square foot: 36,000÷5,000=36,000 ÷ 5,000 = 36,000÷5,000=7.20/SF

Effective Gross Income (EGI) Calculation

Rent on a six-plex: $600 per unit, with two vacancies results in:
- Total potential income: 600x6=600 x 6 = 600x6=3,600
- Reduced income due to vacancies: 3,600–(2x3,600 – (2 x 3,600–(2x600) = $2,400
Effective Gross Income (EGI) = $2,400 after accounting for vacancies.

Property Financial Analysis

Monthly Gross Potential Income (GPI): 50 units x 400/unit=400/unit = 400/unit=20,000
Vacancy Rate: 10%, resulting in 5 vacant units
Effective Gross Income (EGI): GPI - Vacancy Loss = 20,000−(1020,000 - (10% of 20,000−(1020,000) = 20,000−20,000 - 20,000−2,000 = $18,000
Operating Expenses:
- Maintenance Costs: $1,500
- Utility Costs: $500
- Management Fee: 6% of EGI, which is $1,080
- Property Tax: $1,320
Total Operating Expenses: 1,500+1,500 + 1,500+500 + 1,080+1,080 + 1,080+1,320 = $4,400
Net Operating Income (NOI): EGI - Operating Expenses = 18,000−18,000 - 18,000−4,400 = $13,600
Cash Flow: NOI - Debt Service = 13,600−13,600 - 13,600−8,860 = $4,740

Commercial Rent Calculation

Floor 1 Rent: 50’ x 40’ = 2,000 SF x 5/SF=5/SF = 5/SF=10,000
Floor 2 Rent: 20’ x 40’ = 800 SF x 6/SF=6/SF = 6/SF=4,800
Floor 3 Rent: 20’ x 40’ = 800 SF x 7/SF=7/SF = 7/SF=5,600
Total Annual Rent: 10,000+10,000 + 10,000+4,800 + 5,600=5,600 = 5,600=20,400
Monthly Rent: 20,400/12=20,400 / 12 = 20,400/12=1,700

Effective Gross Income on Apartment Buildings

60 Units at $500/unit:
- Total Rent Before Vacancy: 60 x 500=500 = 500=30,000
- Vacancy Loss (10%): $3,000
- EGI After Vacancy: 30,000−30,000 - 30,000−3,000 = $27,000
100 Units at $400/unit with 25 Vacant:
- Total Rent Before Vacancy: 100 x 400=400 = 400=40,000
- Vacancy Loss for 25 Vacant Units: 400x25=400 x 25 = 400x25=10,000
- EGI After Vacancy: 40,000−40,000 - 40,000−10,000 = $30,000

Tenant Security Deposit Calculation

Initial Tenant Security Deposit: $375
Charges Due After Move-Out:
- Extra Day Rent: $17
- Late Fees: $20
- Door Repair: $25
- Light Bulbs: $5
- Normal Wear: $15
Total Charges: 17+17 + 17+20 + 25+25 + 25+5 + 15=15 = 15=67
Security Deposit to be Returned: 375−375 - 375−67 = $308

Annual Rent Calculation

Monthly rent is $0.10 per square foot.
Rentable space size is 4,500 square feet.
Annual rent calculation: ( 4,500 , \text{SF} \times 0.10 , \text{per SF} \times 12 , \text{months} = $5,400 ).

Prorated Rent Calculation

Full monthly rent for an apartment is $600.
Tenant moves in on the 20th of the month; there are 30 days in the month.
Daily rent calculation: ( 600 \div 30 = $20 , \text{per day} ).
Prorated rent for 11 days: ( 20 \times 11 = $220 ).

Effective Gross Rent Calculation

Commercial lease duration is five years with the first six months rent-free.
Total lease months: ( 5 \times 12 = 60 ) months minus 6 months (rent-free) equals 54 months of paid rent.
Annual rent is 10,000.Monthlyrentcalculation:(10,000÷12=10,000. Monthly rent calculation: ( 10,000 \div 12 = 10,000.Monthlyrentcalculation:(10,000÷12=833.33 ).
Total effective gross income from paid months: ( 833.33 \times 54 = $44,999.99 ).
Effective monthly rent over the entire lease: ( 44,999 \div 60 = $750 ).

Rent Distribution by Year

Year 1 effective rent: ( 10,000 \div 2 = $5,000 ).
Year 2 to Year 5: total rent is ( 10,000 \times 4 = $40,000 ).
Total rent over five years: ( 40,000 + 5,000 = $45,000 ).
Monthly effective gross income: ( 45,000 \div 60 = $750 ).

Monthly and Annual Rent per Square Foot

Apartment building consists of 10 units, each measuring 800 square feet.
Total area: ( 800 \times 10 = 8,000 , \text{SF} ).
Total rent collected monthly from all apartments: ( 650 \times 10 = $6,500 ).
Monthly rent per square foot: ( 6,500 \div 8,000 , \text{SF} = $0.813 , \text{per SF} ).
Annual rent per square foot: ( 0.813 \times 12 = $9.756 , \text{per SF} ).

Monthly Rent on a Building

Building dimensions are 50’ x 75’.
Annual rent is 18,400;monthlyrentcalculation:(18,400÷12=18,400; monthly rent calculation: ( 18,400 \div 12 = 18,400;monthlyrentcalculation:(18,400÷12=1,533.33 ).

Vacancy Rate Calculations

Single-family home vacancy rate calculated by renting for 11 out of 12 months results in an 8.3% vacancy.
For an apartment building with 10 units, where 3 units are vacant for 2 months each, the annual vacancy rate is 5%.

Management Fees and Markup

Managing a 100-unit apartment complex incurs a total cost of 15,000;feeperunitis15,000; fee per unit is 15,000;feeperunitis150. To achieve a 10% profit, the necessary fee is 166.67perunit,requiringamarkupof166.67 per unit, requiring a markup of 166.67perunit,requiringamarkupof16.67.

Commission for Maintaining Costs

To maintain cost per unit with a gross possible income (GPI) of 250,000anda10250,000 and a 10% vacancy rate, the effective income after vacancies is 250,000anda10225,000. Charging $16,700 results in a commission rate of 7.4%.

Owner Distribution for Four-Plex

In managing a four-plex renting each unit at 500/month,thetotalmonthlyrentis500/month, the total monthly rent is 500/month,thetotalmonthlyrentis2,000. After accounting for 6,000annualoperatingcosts(6,000 annual operating costs (6,000annualoperatingcosts(500/month), the owner receives a distribution of $1,500 each month.

Impact of Rent Increase on Effective Gross Income (EGI)

Current rent for 50 units at 450resultsinanEGIof450 results in an EGI of 450resultsinanEGIof22,500. After a 10% increase, the new rent is 495.Withfivetenantsvacatingpost−increase,theEGIadjuststo495. With five tenants vacating post-increase, the EGI adjusts to 495.Withfivetenantsvacatingpost−increase,theEGIadjuststo22,275 after accounting for vacancies.

Property Management Financial Calculations

Monthly debt service for a property manager is 400,equatingto400, equating to 400,equatingto4,800 annually.
Annual property taxes amount to 1,200,leadingtototalannualexpensesof1,200, leading to total annual expenses of 1,200,leadingtototalannualexpensesof6,000.
To achieve a 25% profit margin, the property manager must charge a monthly rent of approximately $666.67.

Rent Increase Scenario

Current rent for a 70-unit complex is set at 350perunit,generatingaGrossPotentialIncome(GPI)of350 per unit, generating a Gross Potential Income (GPI) of 350perunit,generatingaGrossPotentialIncome(GPI)of24,500 monthly.
After a 10% rent increase, the new gross income becomes $26,950.
Monthly rent after increase is approximately $385 per unit.
Effective Gross Income (EGI) before the increase remains at $24,500.

Vacancy Impacts After Rent Increase

Post-increase, 10% of the units (7 out of 70) become vacant.
The effective income after the vacancy is calculated as follows: 63 units occupied at 385=385 = 385=24,255 EGI.

Vacancy Loss Calculation

The difference between GPI (200,000)andEGI(200,000) and EGI (200,000)andEGI(188,000) indicates a total yearly vacancy loss of $12,000.
Monthly vacancy loss amounts to $1,000, derived by dividing the annual loss by 12 months.

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