How much profit will Investor Mike gain if he raises the rent on his 200-unit property by 5% over the next year?

To determine how much profit Investor Mike will gain by raising the rent on his 200-unit property by 5%, it's important to first calculate the total monthly rent from the property before the increase and then see how that increase translates into annual profit.

If we assume each unit currently rents for a specific amount, raising the rent by 5% means that for every unit, he will earn an additional 5% of the current rent. The total increase in rent across all 200 units can be formulated as:

Total increase = Number of units × Current rent per unit × 5%

However, the question does not specify the current rent. Instead, the answer assumes an average rent. For the purpose of this example, we can calculate it based on a hypothetical average rent amount.

Let’s say the current rent per unit is $1,000 (as an example for clarity).

• The total current rent for 200 units before the increase: 200 units × $1,000/unit = $200,000 per year.

Now, calculating the 5% increase: 5% of $200,000 = $10,000 increase in annual rent.

When applying this increase across the year, the result reflects that Investor Mike will gain an additional