Real Estate Math
A property has net operating income of $54,000 and a value of $675,000. What is the capitalization rate?
A5%
B6%
C7%
D8%✓ Correct
Explanation
Cap rate = NOI ÷ Value = $54,000 ÷ $675,000 = 0.08 = 8%. Using the values given ($54,000, $675,000), apply the appropriate formula.. The correct answer is 8%.. This is a common calculation on the Connecticut real estate exam.
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