Real Estate Math

A Missouri property generates $5,000/month rent with a 10% vacancy rate. Annual operating expenses are $24,000. Using an 8% cap rate, what is the value?

A$375,000✓ Correct
B$600,000
C$450,000
D$480,000

Explanation

Annual gross = $5,000 × 12 = $60,000. Vacancy = $60,000 × 10% = $6,000.

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