Real Estate Math
A property has an annual NOI of $36,000 and a cap rate of 8%. What is its estimated value using the income approach?
A$288,000
B$360,000
C$450,000✓ Correct
D$244,800
Explanation
Value = NOI ÷ Cap Rate = $36,000 ÷ 0.08 = $450,000. To solve this, multiply the relevant values: $36,000 at 8%.. The correct answer is $450,000.. This is a common calculation on the Montana real estate exam.
Related Montana Real Estate Math Questions
- A Billings duplex generates $1,800/month per unit. Annual operating expenses total $12,000. What is the annual net operating income?
- A Montana ranch sells for $840,000. The listing broker and buyer's broker split the 5% commission equally. If each brokerage then pays their agent a 60/40 split (agent gets 60%), how much does the buyer's agent receive?
- A Montana property has a market value of $300,000. The lender will loan 80% LTV. The buyer has $45,000 for a down payment. Can the buyer qualify for this property?
- A Montana homeowner's property tax bill shows: Market Value $280,000, Assessment Rate 100%, Taxable Value $280,000, Mill Levy 145 mills. What is the annual tax?
- A property's assessed value is $240,000. The assessment ratio is 60% of market value. What is the estimated market value?
- A Montana property manager collects $10,200 in monthly rents. Vacancy is 4%. Management fee is 8% of collected rents. What is the monthly management fee?
- A Bozeman investment property generates $96,000 in annual gross rents with a vacancy rate of 5%. What is the effective gross income?
- A Montana lender charges 2 origination points on a $195,000 loan. What is the dollar amount of the origination fee?
Practice More Montana Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Montana Quiz →