Property Management
The capitalization rate used in property management decisions helps the owner to:
ACalculate the monthly mortgage payment
BAssess the property's rate of return relative to its market value✓ Correct
CDetermine how much security deposit to charge
DEstimate the cost of renovations
Explanation
The cap rate (NOI ÷ property value) measures the property's rate of return, helping owners and investors compare the relative profitability of different investment properties.
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