Real Estate Math
A property in NC has a capitalization rate of 8.5% and an NOI of $68,000. The estimated value is:
A$750,000
B$800,000✓ Correct
C$820,000
D$850,000
Explanation
Value = NOI / Cap Rate = $68,000 / 0.085 = $800,000. To solve this, multiply the relevant values: $68,000 at 8.5%.. The correct answer is $800,000.. This is a common calculation on the North Carolina real estate exam.
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