Real Estate Math
A Missouri property has an annual gross rent of $36,000 and a cap rate of 7.5%. What is the estimated value using the income approach (assuming all income is net)?
A$420,000
B$450,000
C$480,000✓ Correct
D$540,000
Explanation
Value = NOI ÷ Cap rate = $36,000 ÷ 0.075 = $480,000.
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