Real Estate Math
An investor purchases a Georgia rental property for $180,000. The annual net operating income (NOI) is $14,400. What is the capitalization rate?
A6%
B7%
C8%✓ Correct
D9%
Explanation
Cap Rate = NOI ÷ Purchase Price = $14,400 ÷ $180,000 = 0.08 = 8%.
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