How much gross annual management fee does a property manager earn, managing 127 units with a 3.5% vacancy rate and a management fee of 8.2% on gross rent?

To determine the gross annual management fee for the property manager, first, it's essential to calculate the effective occupancy of the 127 units after accounting for the vacancy rate.

The vacancy rate of 3.5% implies that 3.5% of the units are not rented. Therefore, to find the occupied units, you would multiply the total number of units by (1 - vacancy rate):

Occupied Units = Total Units × (1 - Vacancy Rate)

Occupied Units = 127 × (1 - 0.035)

Occupied Units = 127 × 0.965

Occupied Units = 122.355

Since units can't be partially occupied in this context, you would round this figure to approximately 122 units.

Next, you would need to establish the gross rent for those units. Assuming each unit generates an average monthly rent (which would typically need to be defined or assumed for a full calculation, but is not stated here), the total annual rent can be calculated.

If we haven’t been given a specific rent amount, we can still reason through the percentages provided. Since the management fee is set at 8.2% of the gross annual rent, calculating the fee using the occupancy and the total units results in