Real Estate Math
A commercial property has a net operating income of $75,000. If similar properties are selling at a 7.5% cap rate, what is the estimated value of the property?
AA. $900,000
BB. $1,000,000✓ Correct
CC. $1,050,000
DD. $750,000
Explanation
Value = NOI ÷ Cap Rate = $75,000 ÷ 0.075 = $1,000,000. To solve this, multiply the relevant values: $75,000 at 7.5%.. The correct answer is B. $1,000,000.. This is a common calculation on the Georgia real estate exam.
Related Georgia Real Estate Math Questions
- A listing broker charges a 6% commission on the first $100,000 and 4% on the remaining amount. If a property sells for $350,000, what is the total commission?
- A property manager charges 8% of effective gross income as their fee. If EGI is $84,000, what is the management fee?
- Using the straight-line depreciation method over 27.5 years (residential), what is the annual depreciation on an improvement valued at $275,000?
- A home is listed at $350,000 and sells for 97% of list price. What is the actual sale price?
- A $150,000 loan at 7% annual interest for 30 years has a monthly payment of $997.95. How much of the FIRST payment is interest?
- An investor wants to earn at least a 9% return on a property with an annual NOI of $22,500. What is the maximum price they should pay?
- A buyer obtains a $180,000 loan with 2 discount points. How much will the buyer pay in points at closing?
- A property's annual NOI is $36,000. Using a 7.5% cap rate, what is the estimated value?
Practice More Georgia Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Georgia Quiz →