# Real Estate Math Class : Lesson 122

By
Education & Training TN LIC# 290452 (retired)

An investor purchased a commercial building for \$1,200,000.

The gross income form the building was \$230,000 the first year.

The expenses for the building were \$110,000.

What is the rate of return the investor receives ?

Please take your time. The answer is posted below the wildlife photo (which is royalty free, as they all are).

A. .10 or 10%

We need to find the net income from the building by subtracting the expenses from the gross income.

\$230,000 gross income minus \$110,000 leaves a net income of \$120,000.

Divide the cost of the building, \$1,200,000 into \$120,000, to find that the rate of return is .10 or 10%.

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