Real Estate Math (alternative)

A Maryland property has a capitalization rate of 8.5% and an NOI of $51,000. What is its estimated value?

A$433,500
B$500,000
C$600,000✓ Correct
D$650,000

Explanation

Value = NOI ÷ Cap Rate = $51,000 ÷ 0.085 = $600,000.

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