Real Estate Math
A commercial property has an annual NOI of $84,000 and an asking price of $1,050,000. What is the capitalization rate?
A6%
B7%
C8%✓ Correct
D9%
Explanation
Cap rate = NOI / Value = $84,000 / $1,050,000 = 0.08 = 8%. Using the values given ($84,000, $1,050,000), apply the appropriate formula.. The correct answer is 8%.. This is a common calculation on the North Carolina real estate exam.
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