Real Estate Math
A Kansas investor purchases a rental property for $320,000. Annual NOI is $28,800. What is the cap rate?
A8%
B9%✓ Correct
C10%
D11%
Explanation
Cap Rate = NOI / Purchase Price = $28,800 / $320,000 = 0.09 = 9%. Using the values given ($320,000, $28,800), apply the appropriate formula.. The correct answer is 9%.. This is a common calculation on the Kansas real estate exam.
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