Real Estate Math

A Missouri property has an NOI of $24,000 and a cap rate of 8%. What is the estimated value using income capitalization?

A$192,000
B$240,000
C$300,000✓ Correct
D$320,000

Explanation

Value = NOI ÷ Cap rate = $24,000 ÷ 0.08 = $300,000.

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