I got another stupid question about the 50% rule.

[Diem Tran]

Hi Everyone,

I understand that the 50% rule is basically, in MF, is the general rule for expenses which includes vacancy, management, trash, etc.  But is it taken from the actually income or potential income or potential market income????

For example,

In a 20 unit apartment building, all one bedroom one bath and pink in color.

18 are rented, 2 vacant.

The 18 that are rented for $500 per month.  But the market rent is actually $550 per month.

Is 50% expenses taken from 18x500 or 20x500 (20 units in total) or 20x$550 (market potential?

Thank you in advance.