Real Estate Math
A Nevada investment property has a purchase price of $900,000 and produces $85,000 in NOI annually. What is the cap rate?
A8.5%
B9.4%✓ Correct
C9.7%
D10.0%
Explanation
Cap rate = NOI / Price = $85,000 / $900,000 = 0.0944 = 9.4%. Using the values given ($900,000, $85,000), apply the appropriate formula.. The correct answer is 9.4%.. This is a common calculation on the Nevada real estate exam.
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