Real Estate Math Practice Exam

Price per square foot represents how much you're paying for each square foot of space. To calculate it, divide the purchase price by the total gross square footage, yielding dollars per square foot. This lets you compare properties of different sizes on a common basis. The other formulas involve income metrics like net operating income or effective gross income, which relate to profitability rather than cost per unit of space, so they don’t produce price per square foot. For example, a $600,000 purchase price with 2,400 gross square feet equals $600,000 ÷ 2,400 = $250 per square foot.