Real Estate Math
An Illinois investor pays $475,000 for a property and receives monthly rents totaling $4,500. What is the annual cap rate (using PGI without expense deduction)?
A11.37%✓ Correct
B9.47%
C10.15%
D12.0%
Explanation
Annual PGI = $4,500 × 12 = $54,000. Gross income cap rate = PGI ÷ Price = $54,000 ÷ $475,000 = 0.
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