Real Estate Math
A Michigan property generates $3,200/month in rent. Annual operating expenses are $12,000. If the cap rate is 7%, what is the estimated value?
A$32,000✓ Correct
B$480,000
C$384,000
D$532,000
Explanation
Annual gross income = $3,200 × 12 = $38,400. NOI = $38,400 − $12,000 = $26,400.
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