If a property has an effective gross income of $100,000 and expenses of $30,000, what is the net operating income?

If a property has an effective gross income of $100,000 and expenses of $30,000, what is the net operating income?

• A. $40,000
• B. $60,000
• C. $70,000
• D. $30,000

Answer: (C)

To determine the net operating income (NOI) of a property, you subtract the total expenses from the effective gross income. In this scenario, the effective gross income is given as $100,000, and the expenses are $30,000. The calculation is as follows: Net Operating Income = Effective Gross Income - Expenses Net Operating Income = $100,000 - $30,000 Net Operating Income = $70,000 This means that after accounting for the operating expenses, the remaining income the property generates, which is referred to as the net operating income, is $70,000. This value is crucial for investors and real estate professionals as it helps assess the profitability and operational efficiency of the property.

To determine the net operating income (NOI) of a property, you subtract the total expenses from the effective gross income. In this scenario, the effective gross income is given as $100,000, and the expenses are $30,000.

The calculation is as follows:

Net Operating Income = Effective Gross Income - Expenses

Net Operating Income = $100,000 - $30,000

Net Operating Income = $70,000

This means that after accounting for the operating expenses, the remaining income the property generates, which is referred to as the net operating income, is $70,000. This value is crucial for investors and real estate professionals as it helps assess the profitability and operational efficiency of the property.