• Vacancy rate: 5% Step 1: Gross Annual Rental Income After Vacancy: • Gross Annual Rental Income = Monthly rental income x 12 • Gross Annual Rental Income = $17,200 x 12 = $206,400 • Vacancy allowance: 5% x $206,400 = $10,320 • Gross Annual Rental Income after vacancy = $206,400 - $10,320 = $196,080 Operating Expenses: • Property management fee: 5% of gross rental income • Property management fees = 5% x $196,080 = $9,804 • Repair and maintenance: 5% of gross rental income • Repair and maintenance expenses = 5% x $196,080 = $9,804 • Snow and lawn maintenance: $280 per month x 12 = $3,360 • Insurance: $450 per month x 12 = $5,400 • Property taxes: $15,000 Additional Income: • Total monthly parking income: $65 x 8 = $520 • Annual parking income: $520 x 12 = $6,240 Step 2: Total Expenses Total expenses = Property management fees + Repair and maintenance expenses + Snow and lawn maintenance + Insurance + Property taxes Total expenses = $9,804 + $9,804 + $3,360 + $5,400 + $15,000 = $43,368 Step 3: Net Operating Income (NOI): • NOI = Gross Annual Rental Income after vacancy + Parking income - Total expenses • Monthly parking fee per spot: $65 • Total number of parking spots: 8
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