Twelve different units in a 50-unit building had a change of tenancy during one year. What is the turnover rate, measured as the units with a change as a percentage of total units?
Correct Answer
B) 24%
12÷50×100 = 24. Common errors: inverting the ratio (total units ÷ changed units) gives 417%; dividing by total units plus changed units gives 19%; dividing by the units without a change gives 32%.
Why This Is the Correct Answer
Option B is correct because the defined turnover rate is 12 changed units ÷ 50 total units = 0.24, or 24%. The numerator is the distinct units with a change and the denominator is the full unit count, exactly as the definition states. No other base is called for.
Why the Other Options Are Wrong
Option A: 19%
Option A, 19%, comes from dividing by total units plus changed units: 12 ÷ (50 + 12) × 100 = 19%. The definition uses total units alone, so the result is 12 ÷ 50 × 100 = 24%.
Option C: 32%
Option C, 32%, comes from dividing by the units without a change: 12 ÷ (50 − 12) × 100 = 12 ÷ 38 × 100 = 32%. The definition divides by all 50 units, giving 24%.
Option D: 417%
Option D, 417%, comes from inverting the ratio: 50 ÷ 12 × 100 = 417%. A share of units cannot exceed 100% here; the correct figure is 12 ÷ 50 × 100 = 24%.
Part over whole
A rate expressed as a share puts the part (changed units) on top and the whole (all units) on the bottom.
How to use: Use this to set up any percentage-of-total calculation without inverting it.
Exam Tip
When the question supplies a definition, follow it exactly; a result above 100% for a share of units signals an inverted ratio.
Common Mistakes to Avoid
- -Inverting the ratio and dividing total units by changed units
- -Using only the unchanged units as the denominator
- -Adding the changed units to the total before dividing
Concept Deep Dive
Analysis
This question tests applying a stated ratio definition correctly. Turnover rate is defined here as distinct units with a tenancy change divided by total units. Dividing 12 by 50 and multiplying by 100 gives 24%.
Background Knowledge
Turnover and occupancy measures help appraisers judge market demand, tenant stability and likely leasing costs. Because such ratios can be defined in different ways, the appraiser should use and disclose a consistent definition. Market research of this kind supports conclusions about rents, vacancy and absorption.
Real-World Application
An appraiser reviewing an apartment rent roll counts how many distinct units changed tenants over the past year. She computes the turnover share against total units and compares it with competing buildings to judge whether the subject's tenant stability is typical. That comparison informs her vacancy and leasing-cost assumptions.
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Market analysis confirms that seller financing at 3%, versus a 6% market rate, increased a comparable sale price. What adjustment removes that financing premium?
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A site legally permits at most 40 units and can physically support 50. Supported comparable analyses find 30 and 40 units financially feasible, with 40 units producing the highest net land value after costs, timing and required return. Which use is maximally productive among these alternatives?