Property Valuation
An Iowa appraiser determines the value of a property using the income approach. The subject property has an NOI of $60,000 and comparable properties are capitalized at 6.5%. What is the value?
A$861,538
B$900,000
C$923,077✓ Correct
D$960,000
Explanation
Value = NOI ÷ Cap rate = $60,000 ÷ 0.065 = $923,077. To solve this, multiply the relevant values: $60,000 at 6.5%.. The correct answer is $923,077.. This is a common calculation on the Iowa real estate exam.
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