Real Estate Math
A property with an annual NOI of $54,000 and a purchase price of $675,000 has a cap rate of:
A6%
B7%
C8%✓ Correct
D9%
Explanation
Cap rate = NOI ÷ Purchase Price = $54,000 ÷ $675,000 = 0.08 = 8%. Using the values given ($54,000, $675,000), apply the appropriate formula.. The correct answer is 8%.. This is a common calculation on the Idaho real estate exam.
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