Real Estate Math
A property has a net operating income (NOI) of $24,000 and a cap rate of 8%. What is the estimated value?
A$192,000
B$240,000
C$300,000✓ Correct
D$320,000
Explanation
Value = NOI ÷ Cap rate = $24,000 ÷ 0.08 = $300,000. To solve this, multiply the relevant values: $24,000 at 8%.. The correct answer is $300,000.. This is a common calculation on the Kentucky real estate exam.
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