Real Estate Math
A NJ income property has a 7% cap rate. If the NOI increases from $56,000 to $63,000, what is the increase in property value?
A$50,000
B$100,000✓ Correct
C$75,000
D$120,000
Explanation
Original value = $56,000 ÷ 0.07 = $800,000. New value = $63,000 ÷ 0.07 = $900,000. Increase = $900,000 – $800,000 = $100,000.
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