Real Estate Math
An investor pays $850,000 for a property and receives annual NOI of $59,500. What is the cap rate?
A5.5%
B6.0%
C7.0%✓ Correct
D7.5%
Explanation
Cap rate = NOI ÷ Value = $59,500 ÷ $850,000 = 0.07 = 7.
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