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?

Rationale

$1,975 will be received by the owner this month.

To calculate the owner's total income, we first find the total rent collected, deduct the property manager's fee, and subtract any expenses such as mortgage payments and repairs.

A ($1,700) YOUR ANSWER

This amount does not account for the total rent collected from the 6 units. The total rent is $4,500 ($750 per unit multiplied by 6 units), and the property manager's fee is $450 (10% of $4,500). Subtracting the mortgage payment of $1,800 and the repairs of $275 results in a higher amount than $1,700.

B ($1,975) CORRECT

This is the correct calculation. The total rent collected is $4,500. After deducting the property manager's fee of $450, the owner receives $4,050. From this amount, subtracting the mortgage payment of $1,800 and repairs of $275 equals $1,975, making this the accurate amount the owner will receive.

C ($3,775) YOUR ANSWER

This option mistakenly assumes that all expenses were accounted for without considering the property manager's fee. After charging the 10% fee, the net income from rent is still significantly higher than $3,775 when proper deductions are made.

D ($2,425) YOUR ANSWER

This figure likely results from incorrect deductions or miscalculating the property manager's fee. The owner receives an amount that reflects the total gross rent minus all costs, which leads to a final amount less than $2,425 when all factors are properly calculated.

Conclusion

The correct amount the owner will receive this month, after accounting for rent, the property manager's fee, mortgage payment, and repair expenses, totals $1,975. This reflects a clear understanding of income and expense management in property rental scenarios.

$1,975 will be received by the owner this month.

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