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?
What is the monthly rent for an office space measuring 70’ x 40’ at $8.25 per square foot?
What is the monthly management fee on a space 50’ x 40’ at $8 per square foot (per year), if the commission is 10%?
$3,000 x 12 = $36,000 $36,000 ÷ 5,000 = $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?
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?
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%.
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.
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?
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?
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?
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?
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?
Signup and view all the answers
What is the vacancy rate of a single-family home rented for 11 out of 12 months?
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?
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?
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?
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?
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?
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?
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.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Day 4 Test