math
gross profit
In real estate math, gross profit is the difference between what a property sold for and what the owner paid for it, before considering selling costs, taxes, or other expenses. It is often used to find percentage of profit, calculated as profit divided by the original cost. Net profit, by contrast, subtracts expenses such as commissions and closing costs.
- Exam tip
- Percent profit is based on the original cost, not the sale price. Watch whether the problem asks for gross or net.
- Example
- An investor buys a house for $160,000 and sells it for $200,000, a gross profit of $40,000, or 25%.
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Last verified: 2026-10-23