Real Estate Math

Using the T-bar (Income/Rate/Value), if a property's NOI is $72,000 and its value is $900,000, what is the cap rate?

A6%
B7%
C8%✓ Correct
D9%

Explanation

Cap rate = NOI / Value = $72,000 / $900,000 = 0.08 = 8%.

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