Real Estate Math
A Colorado property has gross annual rents of $100,000. Operating expenses are $40,000. The cap rate is 8%. What is the market value?
A$625,000
B$750,000✓ Correct
C$800,000
D$1,000,000
Explanation
NOI = $100,000 − $40,000 = $60,000 (assuming no vacancy). Value = NOI / Cap Rate = $60,000 / 0.
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