Real Estate Math
A New Mexico investment property has an NOI of $55,000 and sold for $700,000. What is the cap rate?
A6.8%
B7.2%
C7.86%✓ Correct
D8.0%
Explanation
Cap rate = NOI / Sale Price = $55,000 / $700,000 = 0.0786 = 7.86%. Using the values given ($55,000, $700,000), apply the appropriate formula.. The correct answer is 7.86%.. This is a common calculation on the New Mexico real estate exam.
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