Real Estate Math
A property has a NOI (Net Operating Income) of $54,000. If the capitalization rate is 6%, what is the estimated property value?
A$324,000
B$756,000
C$900,000✓ Correct
D$3,240,000
Explanation
Value = NOI ÷ Cap Rate = $54,000 ÷ 0.06 = $900,000. This is the income approach to value used in commercial appraisals.
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