Free Pennsylvania Real Estate Practice Exam Practice Question
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 management fee, plus $275. What will the owner receive this month?
Correct Answer: C
Rationale: To determine the amount the owner will receive, first calculate the total rent collected from the 6 units: 6 units × $750 = $4,500. The property manager charges a management fee of 10% of gross rents, which amounts to $4,500 × 0.10 = $450. Additionally, there is a flat fee of $275. Therefore, the total management fee is $450 + $275 = $725. Subtracting this from the total rent collected gives: $4,500 - $725 = $3,775.
Option A ($1,700) underestimates the rent collected. Option B ($1,975) incorrectly accounts for the management fee. Option D ($2,425) miscalculates the total deductions. Only option C accurately reflects the owner's net income after management fees.
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