Real Estate Math
A NH investor is evaluating a property with an asking price of $895,000 and annual NOI of $72,000. What cap rate does this represent?
A7.5%
B8.0%✓ Correct
C8.5%
D9.0%
Explanation
Cap rate = NOI / Value = $72,000 / $895,000 = 0.0804 = approximately 8.
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