In calculating net operating income, vacancy losses must be subtracted from the gross income collected. The normal range for vacancy and collection losses for apartment, office, and retail properties is:
A) between zero and one percent
B) between one and five percent
C) between five and fifteen percent
D) between fifteen and twenty percent

Question

Quizplus · Accepted Answer

Vacancy and collection losses account for the potential income not received due to unoccupied units or uncollected rent. For apartment, office, and retail properties, a normal range for these losses is between five and fifteen percent, reflecting typical market conditions and property management effectiveness.

In Calculating Net Operating Income, Vacancy Losses Must Be Subtracted