Hawaii Pre-Licensing National Practice Exam

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Prepare for the Hawaii Pre-Licensing National Exam. Study with flashcards and multiple choice questions, each question provides hints and explanations. Get ready for success!

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What would be the management fee on gross rent collection of $222,500?

$15,000
$15,800
$16,000
$18,500

The correct answer is: $15,800

To determine the management fee on gross rent collection, it is essential to understand how management fees are typically calculated in property management scenarios. Generally, management fees are expressed as a percentage of the gross rental income collected. If we take the example of a 7.1% management fee, which is common in many property management agreements, we can calculate the fee as follows: 1. Convert the percentage into a decimal format by dividing by 100. For 7.1%, this would be 0.071. 2. Multiply the gross rent collection amount by this decimal. Thus, $222,500 multiplied by 0.071 equals approximately $15,797.50. 3. Rounding this figure gives us about $15,800. This calculation shows that the management fee on a gross rent collection of $222,500 at a rate of 7.1% would indeed yield a management fee of $15,800, which matches the indicated choice. Therefore, this confirms the accuracy of the fee calculated based on typical industry percentages for property management.