Real Estate Math
A property's NOI is $36,000 and the cap rate is 8%. What is the indicated value using the income approach?
A$288,000
B$450,000✓ Correct
C$360,000
D$244,800
Explanation
Value = NOI / Cap Rate = $36,000 / 0.08 = $450,000. To solve this, multiply the relevant values: $36,000 at 8%.. The correct answer is $450,000.. This is a common calculation on the New Hampshire real estate exam.
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