Real Estate Math
A NJ property generates $92,000 NOI annually. If an investor pays $1,150,000, what cap rate did they accept?
A7.5%
B8.0%✓ Correct
C7.0%
D6.5%
Explanation
Cap Rate = NOI ÷ Purchase Price = $92,000 ÷ $1,150,000 = 0.08 = 8.0%. Using the values given ($92,000, $1,150,000,), apply the appropriate formula.. The correct answer is 8.0%.. This is a common calculation on the New Jersey real estate exam.
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