Real Estate Math
A Nevada property has a 7.5% cap rate. If the property is valued at $1,200,000, what is the annual NOI?
A$72,000
B$90,000✓ Correct
C$75,000
D$84,000
Explanation
NOI = Value x Cap Rate = $1,200,000 x 0.075 = $90,000. To solve this, multiply the relevant values: $1,200,000, at 7.5%.. The correct answer is $90,000.. This is a common calculation on the Nevada real estate exam.
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