Real Estate Math
An investment property has an NOI of $36,000 and sells for $450,000. What is the cap rate?
A6%
B7%
C8%✓ Correct
D9%
Explanation
Cap Rate = NOI ÷ Value = $36,000 ÷ $450,000 = 0.08 = 8%. Using the values given ($36,000, $450,000), apply the appropriate formula.. The correct answer is 8%.. This is a common calculation on the Kentucky real estate exam.
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