Real Estate Math
A Delaware commercial property has an annual NOI of $85,000 and is valued at $1,100,000. What is the cap rate?
A6.9%
B7.3%
C7.7%✓ Correct
D8.1%
Explanation
Cap rate = NOI ÷ Value = $85,000 ÷ $1,100,000 = 0.07727 = approximately 7.7%. Using the values given ($85,000, $1,100,000), apply the appropriate formula.. The correct answer is 7.7%.. This is a common calculation on the Delaware real estate exam.
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