Real Estate Math
A Hawaii investor holds a property for 5 years, earning $50,000 per year in NOI. The purchase price was $700,000. What is the total return on investment (NOI only, no appreciation)?
AA. 35.7%✓ Correct
BB. 40%
CC. 42.9%
DD. 50%
Explanation
Total NOI = $50,000 × 5 = $250,000. Total return = $250,000 / $700,000 = 35.71% ≈ 35.7%. Using the values given ($50,000, $700,000), apply the appropriate formula.. The correct answer is A. 35.7%.. This is a common calculation on the Hawaii real estate exam.
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