Real Estate Math
A New Mexico commercial property sells for $2,400,000 with a cap rate of 6.5%. What is the annual NOI?
A$144,000
B$156,000✓ Correct
C$168,000
D$120,000
Explanation
NOI = Value x Cap Rate = $2,400,000 x 6.5% = $2,400,000 x 0.065 = $156,000. To solve this, multiply the relevant values: $2,400,000 at 6.5%.. The correct answer is $156,000.. This is a common calculation on the New Mexico real estate exam.
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