Real Estate Math
An investor pays $400,000 for a property with an annual NOI of $28,000. What is the capitalization rate?
A5.5%
B6.5%
C7.0%✓ Correct
D8.0%
Explanation
Cap rate = NOI ÷ Purchase price = $28,000 ÷ $400,000 = 0.07 = 7.
Related Indiana Real Estate Math Questions
- A property in Terre Haute, Indiana has a building value of $180,000 and land value of $45,000. The building has a useful life of 30 years. What is the annual straight-line depreciation for tax purposes?
- An Indiana commercial property grosses $180,000 in annual rent with a 10% vacancy rate and $62,000 in operating expenses. What is the NOI?
- A property has an assessed value of $180,000. The tax rate is $2.50 per $100 of assessed value. What is the annual property tax?
- A property sells for $400,000. The buyer pays 25% down. The lender charges 1.5 origination points on the loan. What are the origination points in dollars?
- A property manager charges 8% of gross collected rents. Monthly rents collected are $12,500. What is the monthly management fee?
- A property generates annual gross rent of $42,000, has a 5% vacancy rate, and operating expenses of $15,000. What is the NOI?
- A lot is 75 feet wide and 130 feet deep. The price per square foot is $12. What is the lot price?
- A broker receives a 5.5% commission on a $260,000 sale and splits it 55/45 with a cooperating broker. How much does the cooperating broker receive?
Practice More Indiana Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Indiana Quiz →