Real Estate Math
A Minnesota property has a NOI of $31,500 and the investor paid $350,000. What is the overall capitalization rate?
A7%
B8%
C9%✓ Correct
D10%
Explanation
Cap rate = NOI / Value = $31,500 / $350,000 = 0.09 = 9%. The capitalization rate measures a property's yield independent of financing. Minnesota investors compare cap rates across different investment opportunities to assess relative value and risk. Higher cap rates indicate higher yield but may also reflect higher risk.
Related Minnesota Real Estate Math Questions
- A property in Minnesota is assessed at $320,000. The tax rate is 1.2%. What is the annual property tax?
- A property is purchased for $180,000 and sold 3 years later for $225,000. What is the percentage gain?
- A buyer in Minnesota finances $280,000 at 6.5% for 30 years. Using a payment factor of $6.32 per $1,000, what is the monthly P&I payment?
- A Minnesota property is described as the E 1/2 of the SW 1/4 of a section. How many acres does this parcel contain?
- A Minnesota home has a gross rent multiplier (GRM) of 95 and currently generates $1,650/month in rent. What is the estimated market value?
- A Minnesota property has an assessed value of $340,000 and a mill rate of 45 mills. What is the annual property tax?
- A Minnesota property has a monthly rent of $2,400 and sells for $336,000. What is the gross rent multiplier (GRM)?
- A Minnesota investor earns $2,000 per month on a $300,000 rental property after all expenses. What is their annual cash-on-cash return if they put 25% down?
Practice More Minnesota Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Minnesota Quiz →