7. A property manager collects rent on 6 rental units for an owner. Each unit rents for $750 a month. The property manager charges the owner 10% of gross rents for the month and pays the mortgage payment of $1,800. If the manager makes repairs to the property of $275, what will the owner receive this month?
Answer: D
The owner will receive $2,425 this month.
To calculate the amount the owner will receive, first determine the total gross rents collected from the six units, which is $4,500 ($750 per unit multiplied by 6). The property manager's fee of 10% amounts to $450. After deducting the mortgage payment of $1,800 and the repair costs of $275, the owner will receive $2,425.
A) $1,700
Option A is incorrect as it underestimates the amount the owner would receive. It does not accurately account for the total gross rents collected or the deductions made for the property manager's fee, mortgage, and repair costs.
B) $1,975
Option B is also incorrect. It fails to correctly calculate the total rents and does not take into account the total deductions accurately. The amount does not reflect the correct post-deduction amount that the owner should receive.
C) $3,775
Option C is incorrect as well. While it might reflect a figure related to the gross rents or an incorrect deduction calculation, it does not represent the final amount the owner receives after all necessary deductions have been made.
D) $2,425
Option D is the correct choice. It correctly reflects the owner's net income after deducting the property manager's fee, the mortgage payment, and repair costs from the total gross rents collected.
Conclusion
The correct answer, $2,425, accurately represents the final amount the owner receives after all relevant deductions are applied. The other options fail to consider the complete financial picture, including gross rents and the necessary expenses, which is essential for determining the owner's net income.