Real Estate Math
A property's NOI is $48,000 and it has a value of $600,000. What is the cap rate?
A6%
B7%
C8%✓ Correct
D9%
Explanation
Cap Rate = NOI ÷ Value = $48,000 ÷ $600,000 = 0.08 = 8%. Using the values given ($48,000, $600,000), apply the appropriate formula.. The correct answer is 8%.. This is a common calculation on the Montana real estate exam.
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