Real Estate Math
Using the income approach, a NJ property with a 6% cap rate and an asking price of $1,200,000 must generate what annual NOI to justify the price?
A$60,000
B$72,000✓ Correct
C$80,000
D$90,000
Explanation
NOI = Value × Cap Rate = $1,200,000 × 0.06 = $72,000 required annual NOI.
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