Real Estate Math (alternative)
A Maryland commercial property earns $8,000/month in rent. Annual operating expenses are $28,000. The cap rate used is 8%. What is the property value?
A$850,000✓ Correct
B$1,000,000
C$1,020,000
D$700,000
Explanation
Annual gross income = $8,000 × 12 = $96,000. NOI = $96,000 − $28,000 = $68,000.
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