A building has a potential gross rental income of $145,000 with vending receipts of $5,000 and a vacancy rate of 5%. the annual expenses of the building are $15,000 in taxes, insurance $4,000, maintenance $10,000, utilities $6,000, repairs $3,500, legal fees $1,500, management fees @ 4% of effective gross income. what is the effective gross income of the property?

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Business

Braedon Mack

2 December, 17:22

A building has a potential gross rental income of $145,000 with vending receipts of $5,000 and a vacancy rate of 5%. the annual expenses of the building are $15,000 in taxes, insurance $4,000, maintenance $10,000, utilities $6,000, repairs $3,500, legal fees $1,500, management fees @ 4% of effective gross income. what is the effective gross income of the property?

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Adalyn Ward · Answer 1

Effective gross income = Total Potential income-Expenses - management fees

Total potential income = gross rental income + vending receipts - gross rental income vacancy

gross rental = $145000

vending receipts = $5000

rental vacancy = $7250

total potential income = $142,750

Expenses = taxes+insurance + maintenance + utilities + repairs + legal fees

Expenses = $40,000

management fee = (total potential income - expenses) x. 04

management fee = $4110

gross effective income = $142750-$40000-$4110

= $98640