An Alaskan property with an NOI of $75,000 is valued at $1,000,000. The overall capitalization rate is:
Why 7.5% Is Correct
Answer B: 7.5%
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
People Also Study
Related Alaska Questions
- An Alaska appraiser calculates a capitalization rate of 8% for an income property with an NOI of $40,000. Using direct capitalization, the indicated property value is:Property Valuation
- A property generates annual net operating income (NOI) of $60,000. Using a capitalization rate of 8%, the estimated value using the income approach is:Property Valuation
- An Alaska commercial property has a net operating income of $60,000 per year. Using a 6% cap rate, the estimated value is:Property Valuation
- An appraiser in Alaska uses the sales comparison approach and finds three comparable sales. After adjustments, the adjusted values are $310,000, $315,000, and $312,000. The most likely estimate of value using reconciliation would be:Property Valuation
- An Alaska property sells for $500,000. The buyer gets a loan for $400,000. The lender requires an appraisal. The appraiser values the property at $480,000. What is the maximum loan the lender will approve at 80% LTV based on appraised value?Finance
- An Alaska property has an annual NOI of $45,000 and was purchased for $600,000. What is the overall cap rate?Real Estate Math
- What is the transfer tax on an Alaska property selling for $400,000 if the rate is $1 per $500 of value?Real Estate Math
- An Alaska property is assessed at 60% of its $500,000 market value. The tax rate is $15 per $1,000 of assessed value. What is the annual property tax?Real Estate Math
Key Terms to Know
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Math Concepts
Study This Topic
Practice More Alaska Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free Alaska Quiz →