To determine the Net Operating Income (NOI) for this property, follow these steps:
1. Identify Potential Gross Income (PGI):
- Given: The potential gross income is [tex]\( \$350,000 \)[/tex].
2. Identify Effective Gross Income (EGI):
- Given: The effective gross income is [tex]\( \$262,500 \)[/tex].
- The effective gross income takes into account losses due to vacancies and collection losses from the potential gross income.
3. Identify Total Expenses:
- Given: The total expenses are [tex]\( \$138,000 \)[/tex].
4. Calculate the Net Operating Income (NOI):
- The formula for NOI is:
[tex]\[
\text{NOI} = \text{Effective Gross Income (EGI)} - \text{Total Expenses}
\][/tex]
- Substitute the given values into the formula:
[tex]\[
\text{NOI} = \$262,500 - \$138,000
\][/tex]
5. Perform the Calculation:
- Subtract [tex]\( \$138,000 \)[/tex] from [tex]\( \$262,500 \)[/tex]:
[tex]\[
\$262,500 - \$138,000 = \$124,500
\][/tex]
6. Conclusion:
- The Net Operating Income (NOI) for the property is [tex]\( \$124,500 \)[/tex].
Therefore, the correct choice from the given options is:
[tex]\[
\$262,500 - \$138,000 = \$124,500
\][/tex]
