Real Estate Math
A rental property generates $36,000 annual gross income with a 5% vacancy rate. Operating expenses are $14,000. If the cap rate is 7%, what is the estimated value?
A$308,571
B$320,000
C$286,000✓ Correct
D$342,857
Explanation
EGI = $36,000 × (1 – 0.05) = $34,200.
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