Which of the following describes how a property manager would calculate anticipated annual rental income for a budget?

While this method estimates potential income using market rates, it neglects to factor in actual occupancy levels, which can significantly impact real income. Subtracting operating expenses does not address the variability of rental income that arises from vacancies.

This approach is subjective as it relies on the owner's income goals rather than objective market data. It fails to provide a calculation based on actual rental rates and occupancy, limiting its effectiveness in budgeting for anticipated income.

Using the previous year's income as a baseline does not account for changes in market conditions, occupancy rates, or rental pricing strategies. Adding a flat percentage for appreciation is overly simplistic and may not reflect realistic income projections based on current market dynamics.