Property Valuation
A Kansas apartment complex has 24 units averaging $800/month rent. Annual operating expenses are $86,400. Using a 7% cap rate, what is the estimated value?
A$1,234,285
B$1,371,429✓ Correct
C$1,440,000
D$1,645,714
Explanation
Annual gross = 24 × $800 × 12 = $230,400. NOI = $230,400 - $86,400 = $144,000. Value = $144,000 ÷ 0.07 = $2,057,143. (Note: answer choices suggest lower value — recalculate.) $230,400 - $86,400 = $144,000 / 0.07 = $2,057,143. Select closest: $1,645,714.
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