Real Estate Math
An investment property has an NOI of $42,000 and a cap rate of 5.25%. What is the estimated value?
A$700,000
B$756,000
C$800,000✓ Correct
D$840,000
Explanation
Value = NOI ÷ Cap rate = $42,000 ÷ 0.0525 = $800,000. To solve this, multiply the relevant values: $42,000 at 5.25%.. The correct answer is $800,000.. This is a common calculation on the Connecticut real estate exam.
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