Real Estate Math
An Idaho property has annual NOI of $63,500 and comparable sales indicate an 8.5% cap rate. What is the indicated value by the income approach?
A$720,000
B$736,500
C$740,000
D$746,000✓ Correct
Explanation
Value = NOI / Cap Rate = $63,500 / 0.085 = $747,058.82. Best answer: D. To solve this, multiply the relevant values: $63,500 at 8.5%.. The correct answer is $746,000.. This is a common calculation on the Idaho real estate exam.
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