Real Estate Math
A Minnesota property has a NOI of $54,000 and a cap rate of 6%. What is the estimated property value?
A$324,000
B$540,000
C$900,000✓ Correct
D$648,000
Explanation
Value = NOI ÷ Cap rate = $54,000 ÷ 0.06 = $900,000. To solve this, multiply the relevant values: $54,000 at 6%.. The correct answer is $900,000.. This is a common calculation on the Minnesota real estate exam.
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