Real Estate Math

A Nebraska property with an NOI of $58,000 and a cap rate of 8% has what value?

A$464,000
B$580,000
C$725,000✓ Correct
D$406,000

Explanation

Value = NOI ÷ Cap rate = $58,000 ÷ 0.08 = $725,000. To solve this, multiply the relevant values: $58,000 at 8%.. The correct answer is $725,000.. This is a common calculation on the Nebraska real estate exam.

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