Property Management
A 'capitalization rate' in property management context is used to:
ACalculate monthly rent
BConvert a property's NOI into an estimated property value✓ Correct
CDetermine management fees
DSet the security deposit amount
Explanation
The capitalization rate converts an income property's net operating income (NOI) into an estimated value: Value = NOI ÷ Cap Rate. It is a key metric for evaluating investment properties.
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Key Terms to Know
Fair Housing Act
Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
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Math Concepts
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