Real Estate Math

A NJ property has a net operating income (NOI) of $48,000 and a cap rate of 6%. What is the estimated value?

A$600,000
B$700,000
C$800,000✓ Correct
D$900,000

Explanation

Value = NOI ÷ Cap Rate = $48,000 ÷ 0.06 = $800,000.

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