Question

Landlord and tenant have negotiated monthly rent at 5% of gross sale. The property has an...

Landlord and tenant have negotiated monthly rent at 5% of gross sale. The property has an operating expense ratio of 35%, a stabilized vacancy rate of 10%.What are the gross retail sales if net annual operating income is estimated to be $50,000?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Net Operating Income = $50,000

Net Operating Income = Effective Gross Sales - Operating Expense

Net Operating Income (%) = 100% - 35%
= 65%

Effective Gross Sales = Net Operating Income / Net Operating Income (%)
= 50000/0.65
= 76,923.08

Effective Gross Sales = Gross Sales - Vacancy Rate
= 100% - 10%
= 90%

Gross Sales = Effective Gross Sales / Effective Gross Sales (%)
= 76,923.08 / 0.9
Gross Sales = $ 85,470.09


0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A rental property is for sale for $600,000. The property has a tenant with a 4...
A rental property is for sale for $600,000. The property has a tenant with a 4 year lease that pays the landlord $15,000 per month. The current relevant discount rate for this property is 6%. What is the Net Present Value (NPV) of the investment? Is this a good investment? Group of answer choices $23,719; Yes $120,00; Yes -$23,719; No -$548,023; No
A retail tenant signs a variable scale percentage lease that sets the monthly rental rate at...
A retail tenant signs a variable scale percentage lease that sets the monthly rental rate at 5% of gross sales up to $20,000 per month and 2% of gross sales from 20,000 to 50,000 per month. All sales above $50,000 per month have no allotment towards rent. How much does the tenant pay for the first quarter rent if January sales were $28,000, February sales were $15,000 and March sales were $65,000? A) 2,910.00 B) 3,510.00 C) 2,760.00 D) 3,810.00
Potential Gross Income 100,000 sq. ft for the coming year average rent $15.00 per ft. $  ...
Potential Gross Income 100,000 sq. ft for the coming year average rent $15.00 per ft. $   1,500,000 Less Vacancy Allowance (average 8%) $     (120,000) Effective Gross Income $   1,380,000 Cleaning expenses (5% of net rev) $      (69,000) Insurance ($ 0.02 per dollar replacement, R.C. = $40 per ft. $      (80,000) Management & Maintenance (11% of revenue) $    (151,800) Reserve for Replacement (savings for major repairs) $      (50,000) Property Taxes ($0.10 per $100 of R.C.) $          (4,000) $    (354,800) Estimated Net...
Potential Gross Income 100,000 sq. ft for the coming year average rent $15.00 per ft. $  ...
Potential Gross Income 100,000 sq. ft for the coming year average rent $15.00 per ft. $   1,500,000 Less Vacancy Allowance (average 8%) $     (120,000) Effective Gross Income $   1,380,000 Cleaning expenses (5% of net rev) $      (69,000) Insurance ($ 0.02 per dollar replacement, R.C. = $40 per ft. $      (80,000) Management & Maintenance (11% of revenue) $    (151,800) Reserve for Replacement (savings for major repairs) $      (50,000) Property Taxes ($0.10 per $100 of R.C.) $          (4,000) $    (354,800) Estimated Net...
Property sold for $330,000 with 10% down, financed at 7.5% interest for 20 years (monthly payments)....
Property sold for $330,000 with 10% down, financed at 7.5% interest for 20 years (monthly payments). The property has a gross annual income of $42,000. Vacancy collection loss is 8% and expenses are $8,000 per year. What is the equity dividend rate indicated by this sale?
1.A triple net lease shifts more cost uncertainty to a tenant than a gross lease. True...
1.A triple net lease shifts more cost uncertainty to a tenant than a gross lease. True False 2.Commercial properties with stable tenants should have lower cap rates than if these same buildings had very risk tenants. A risky tenant is one who is likely to default on lease payments. True False 3. In gross lease the tenant does not have to even think about electricity consumption, property insurance, taxes, or janitorial services. All of these are covered without limits in...
Industrial Building (125,000 SF) Rent is $ 7.25 PSF NNN (Tenant pays NNN CAM, RE TAXES...
Industrial Building (125,000 SF) Rent is $ 7.25 PSF NNN (Tenant pays NNN CAM, RE TAXES and INSURANCE) Expense Data Vacancy Rate and Credit Loss run approximately 8% per Annum Management Fees are 5% of GOI Utilities are paid by Tenant and are separately metered Real Estate Taxes are $ 125,000 per year Common Area Maintenance is $ .75 PSF Per Annum Accounting and Legal are $ 3500 per annum. Insurance is $ .35 PSF Per Annum Capita Reserves are...
Income Concepts 1.    When Contract rent is established as equal to the market level, this is...
Income Concepts 1.    When Contract rent is established as equal to the market level, this is no Economic rent Excess or deficit rent Market value Reversionary benefit 2. A Property is leasing for $900 per month and the appraiser concludes the market rent is $800 per month. The result is a(n)                A) deficit of $100 to the lessee’s advantage.                B) deficit of $100 to the lessor’s advantage.                C) excess of $100 to the lessee’s advantage.                D)...
Ivy Terrace The third property was Ivy Terrace, a 75-unit garden apartment project under construction near...
Ivy Terrace The third property was Ivy Terrace, a 75-unit garden apartment project under construction near Arlington, Virginia. There was a building moratorium in parts of the county because of inadequate public facilities, preventing much short-term competition. The property was for sale for $11.2 million, but the broker was certain it could be purchased for $11 million. A 10-year, $7 million mortgage at a 4.25% interest rate had been arranged. The loan had a 30-year amortization period. The land was...
Please answer all. In general, the interest appraised of an Owner-Occupied property is: Leased Fee Fee...
Please answer all. In general, the interest appraised of an Owner-Occupied property is: Leased Fee Fee Simple Equity Return None of the above In general, the interest appraised of an Investment property is: Leased Fee Fee Simple Equity Return None of the above In general, the interest appraised of Land is: Leased Fee Fee Simple Equity Return None of the above The CAP Rate is a weighted average of: ROA and LTV Mortgage Constant and LTV Mortgage Constant and ROE...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT