Question

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?

Answer 1

The property manager's annual salary is $42,000

Step-by-step 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