Real Estate Math
A Connecticut investment property has an annual NOI of $55,000. Comparable properties sell at a 7.5% cap rate. What is the estimated value?
A$733,333✓ Correct
B$412,500
C$825,000
D$550,000
Explanation
Value = NOI ÷ Cap rate = $55,000 ÷ 0.075 = $733,333. To solve this, multiply the relevant values: $55,000 at 7.5%.. The correct answer is $733,333.. This is a common calculation on the Connecticut real estate exam.
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