Question

An owner of a six-family apartment complex pays the property manager an annual salary equal to 12% of the property's annual gross income. If the annual gross income is $ 140,000, the annual expenses are $65,000 and the capitalization rate is 10%, what is the property manager's annual salary?

Answer 1

The property manager's annual salary is 12% of the annual gross income of $140,000, which calculates to $16,800.

Step-by-step explanation:

The question involves calculating the annual salary of a property manager based on a percentage of the property's annual gross income. In this scenario, the apartment complex generates an annual gross income of $140,000. The owner agrees to pay the property manager an annual salary equivalent to 12% of this amount. To find the manager's salary, we simply calculate 12% of $140,000.

The calculation is as follows:
12% of $140,000 = 0.12 × $140,000 = $16,800.

Therefore, the property manager's annual salary is $16,800.