Real Estate Math
An Omaha investment property produces an annual NOI of $42,000. The investor paid $525,000. What is the cap rate?
A7%
B8%✓ Correct
C9%
D6%
Explanation
Cap rate = NOI ÷ Property value = $42,000 ÷ $525,000 = 0.08 = 8%. Using the values given ($42,000, $525,000), apply the appropriate formula.. The correct answer is 8%.. This is a common calculation on the Nebraska real estate exam.
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