Real Estate Math
An Idaho rental property has an annual NOI of $32,400 and is purchased for $405,000. What is the cap rate?
A6%
B7%
C8%✓ Correct
D9%
Explanation
Cap rate = NOI ÷ Purchase Price = $32,400 ÷ $405,000 = 0.08 = 8%. Using the values given ($32,400, $405,000), apply the appropriate formula.. The correct answer is 8%.. This is a common calculation on the Idaho real estate exam.
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