Ace the Arizona Real Estate Exam 2025 – Unlock Your Property Dreams!

To determine how much must be collected per month from each apartment in the 8-unit building to achieve a 10% return after taxes and expenses, we first need to understand what a 10% return on the investment entails.

The total investment for the property is $200,000. A desired return of 10% means that the owner seeks an annual income of $20,000 from the property (which is 10% of $200,000). If the return is desired after accounting for all operating expenses and taxes, the gross income before expenses and taxes must sufficiently cover these costs in addition to yielding the desired profit.

To find out how much gross income is needed on a monthly basis, we take the annual required income of $20,000 and divide it by 12 months, resulting in a required monthly income of approximately $1,666.67.

Next, this monthly income needs to be split across the 8 units in the building. When we divide the required monthly income by the number of units (8), we get:

$1,666.67 / 8 = $208.33

This calculation indicates that each apartment must generate about $208.33 to achieve the target return. However, the answer suggests