Real Estate Math
A Florida investor's property has a net operating income of $45,000 and was purchased for $500,000. What is the capitalization rate?
A7.5%
B8.0%
C9.0%✓ Correct
D9.5%
Explanation
Cap Rate = NOI ÷ Value = $45,000 ÷ $500,000 = 0.09 = 9.0%. Using the values given ($45,000, $500,000), apply the appropriate formula.. The correct answer is 9.0%.. This is a common calculation on the Florida real estate exam.
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