Real Estate Math

A Connecticut commercial property has gross annual rents of $325,000. Operating expenses are 38% of gross rents. The cap rate is 8%. What is the value?

A$2,512,500✓ Correct
B$2,029,688
C$4,062,500
D$1,625,000

Explanation

Operating expenses = $325,000 × 38% = $123,500. NOI = $325,000 - $123,500 = $201,500.

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