Real Estate Math

A property has a net operating income (NOI) of $36,000 per year. If the cap rate is 8%, what is the estimated property value?

A$288,000

B$360,000

C$450,000✓ Correct

D$400,000

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 Nebraska real estate exam.

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