Real Estate Math
A Nebraska office property grosses $180,000 annually with a 10% vacancy. Operating expenses are $52,000. What is the cap rate if the property is valued at $1,300,000?
A9.69%✓ Correct
B9.85%
C10.15%
D9.23%
Explanation
EGI = $180,000 × 0.90 = $162,000.
People Also Study
Related Nebraska Questions
- A Nebraska investor purchases a 6-unit building for $480,000. Each unit rents for $850/month with 4% vacancy. Annual operating expenses are $28,000. After 5 years, the building appreciates 15%. What is the new value?Real Estate Math
- A Nebraska property has a potential gross income of $156,000, a 7% vacancy rate, and operating expenses of 43% of EGI. What is the NOI?Real Estate Math
- A property's potential gross income is $60,000 per year. The vacancy rate is 5% and operating expenses are $20,000. What is the net operating income?Real Estate Math
- A Nebraska property with 3 rental units each renting for $950/month has a 5% vacancy rate. What is the effective gross income annually?Real Estate Math
- In Nebraska, an agent who acquires property listed by their own office without disclosure is engaged in:Agency
- A Nebraska commercial property has a NOI of $85,000 and similar properties sell at a 7.5% cap rate. The indicated value is:Property Valuation
- A Nebraska commercial property's capitalization rate decreases from 7% to 6%. With the same NOI, the property value:Property Valuation
- A Nebraska appraiser is asked to determine a property's 'insurable value' for insurance purposes. This is closest to which appraisal concept?Property Valuation
Key Terms to Know
Capitalization Rate (Cap Rate)
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
Study This Topic
Practice More Nebraska Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Nebraska Quiz →