Property Valuation
Capitalization rate (cap rate) is calculated as:
ASale price ÷ monthly rent
BNet operating income ÷ property value✓ Correct
CGross income ÷ expenses
DLoan amount ÷ property value
Explanation
Cap Rate = NOI ÷ Property Value. It expresses the property's income return relative to its value and is used to estimate value in the income approach: Value = NOI ÷ Cap Rate.
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