Real Estate Math
An upstate New York property has a gross potential income of $60,000, operating expenses of $22,000, and a 10% vacancy allowance. The cap rate is 8%. What is the estimated value?
A$475,000✓ Correct
B$450,000
C$500,000
D$425,000
Explanation
EGI = $60,000 - ($60,000 × 10%) = $60,000 - $6,000 = $54,000. NOI = $54,000 - $22,000 = $32,000.
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