Question

If a property's effective gross income is $14,351.40 and vacancy is calculated at 6.2%, what is the potential gross income

a. 15,2000
b. 15,241.19
c. 15,267.45
d. 15,300

Answer 1

To calculate the potential gross income, divide the effective gross income by (1 - vacancy rate). The potential gross income is approximately $15,301.55.

Step-by-step explanation:

To calculate the potential gross income, you can use the formula:

Potential Gross Income = Effective Gross Income / (1 - vacancy rate)

Plugging in the given values:

Potential Gross Income = $14,351.40 / (1 - 0.062)

Potential Gross Income = $14,351.40 / 0.938

Potential Gross Income ≈ $15,301.55

Therefore, the potential gross income is approximately $15,301.55. The closest option is b. 15,241.19.