Real Estate Math
An Illinois rental property generates annual NOI of $42,000. The owner invested $350,000 cash (no mortgage). What is the overall capitalization rate?
A8.33%
B12.0%✓ Correct
C10.0%
D11.5%
Explanation
Cap Rate = NOI ÷ Total Value (or Investment) = $42,000 ÷ $350,000 = 0.12 = 12.
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