Real Estate Math
A NH investment property generates $4,200/month in rent. Annual operating expenses are $8,400. If the cap rate is 7%, what is the property's estimated value?
A$600,000✓ Correct
B$720,000
C$504,000
D$660,000
Explanation
Annual income = $4,200 × 12 = $50,400. NOI = $50,400 − $8,400 = $42,000. Value = NOI / cap rate = $42,000 / 0.07 = $600,000.
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