Question

A 4-unit property has two units rented at $900 per month, and two units rented at $1,200 per month. The vacancy and collection loss rate is 6%. Total operating expenses are $21,525. What is the NOI?

Answer 1

NOI = $25,851

Step-by-step explanation:

To calculate the net operating income (NOI) of the 4-unit property we can use the following formula:

NOI = annual gross income - vacancy and collection loss - operating expenses

(excluding depreciation)

Annual gross income = (2 x $900 x 12) + (2 x $1,200 x 12) = $21,600 + $28,800 = $50,400

vacancy and collection loss rate = $50,400 x 6% = $3,024

operating expenses = $21,525

NOI = $50,400 - $3,024 - $21,525 = $25,851