Property Valuation
What is the capitalization rate if a property with an NOI of $42,000 sells for $560,000?
A6.5%
B7.0%
C7.5%✓ Correct
D8.0%
Explanation
Cap rate = NOI ÷ Value = $42,000 ÷ $560,000 = 0.075 = 7.5%. Using the values given ($42,000, $560,000), apply the appropriate formula.. The correct answer is 7.5%.. This is a common calculation on the Louisiana real estate exam.
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