Real Estate Math
A Massachusetts multifamily property has an annual NOI of $156,000. Using a cap rate of 5.5%, what is the estimated value?
A$2,836,364✓ Correct
B$858,000
C$2,600,000
D$3,120,000
Explanation
Value = NOI ÷ Cap Rate = $156,000 ÷ 0.055 = $2,836,364. To solve this, multiply the relevant values: $156,000 at 5.5%.. The correct answer is $2,836,364.. This is a common calculation on the Massachusetts real estate exam.
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