- CFA Exams
- CFA Level I Exam
- Study Session 15. Alternative Investments
- Reading 39. Private Real Estate Investments
- Subject 4. The income valuation approach
CFA Practice Question
A 5-unit apartment building is being considered as an investment. The average monthly rent per unit is $1,150. The total vacancy and bad debt losses are projected at $3,450. Annual operating expenses include $8,500 for maintenance, $7,000 for property taxes, and $2,200 for property insurance. The net operating income would be closest to:
A. $17,700
B. $47,850
C. $51,300
Explanation: Net operating income is computed as: 

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