Real Estate Math
A Connecticut investor buys a property for $875,000, rents it for $7,200/month, and has annual operating expenses of $42,000. What is the annual cash-on-cash return if the investor put $175,000 down and the annual debt service is $48,000?
A8.0%
B9.6%✓ Correct
C10.4%
D7.2%
Explanation
Annual gross income = $7,200 × 12 = $86,400. NOI = $86,400 - $42,000 = $44,400.
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