Question - Given the following owner's income and expense estimates and with vacancy and collection losses at 5 percent of potential income for an apartment property, formulate and reconstructed operating statement that provides an estimate of net operating income (NOI). The building consists of 10 apartment units that can rent for $550 per month each. Note: there may be items in the owner's statement that should not be included in the operating statement.
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Owner's Income Statement
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Rental Income (last year)
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60000
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Lights
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2200
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Heat
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1700
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Janitor
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4600
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Water
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3700
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Depreciation (tax)
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5000
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Maintenance
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4800
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Repairs
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2800
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Management
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3000
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Mortgage Payments
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6300
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Using the calculated NOI and a capitalization rate of 11.0 percent, calculate the property's indicated market value. Round your final answer to the nearest $1,000.