Property Valuation
A property generates a net operating income (NOI) of $48,000 per year. If the appropriate capitalization rate is 8%, what is the indicated value?
A$384,000
B$480,000
C$600,000✓ Correct
D$640,000
Explanation
Value = NOI ÷ Cap Rate = $48,000 ÷ 0.08 = $600,000.
Related Illinois Property Valuation Questions
- The term 'arm's-length transaction' in real estate means:
- An Illinois property has a net operating income of $48,000 per year and comparable properties are selling at a capitalization rate of 8%. What is the estimated value?
- In Illinois, when an appraiser refers to 'market value,' they mean:
- In the sales comparison approach, what is the process of making dollar adjustments for differences between comparable properties and the subject property?
- What is 'site analysis' in the appraisal process?
- The gross rent multiplier (GRM) method is used to quickly estimate the value of:
- An Illinois real estate appraiser describes a neighborhood as being in the 'declining' phase of the neighborhood life cycle. This means:
- A property earns $48,000 in annual net operating income. An appraiser uses a 7.5% capitalization rate. What is the estimated value?
Practice More Illinois Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Illinois Quiz →