Real Estate Math
A Florida property leases for $28,000/year. The landlord uses a capitalization rate of 7% to value the property. What is the estimated value?
A$400,000✓ Correct
B$280,000
C$350,000
D$196,000
Explanation
Value = Annual Income ÷ Cap Rate = $28,000 ÷ 0.07 = $400,000.
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