The Property Manager Works Under a Management Agreement Between the Property

Multiple Choice

The property manager works under a management agreement between the property owner and the property management firm. As compensation for his duties, the property manager will negotiate a management fee. Given the following information, calculate the dollar compensation to the property manager in year 1. Potential Gross Income of the property: $250,000; Vacancy and Collection Losses: 15%; Miscellaneous Income: $50,000; Management Fee: 3%.

A) $4,875
B) $6,375
C) $7,500
D) $7,875