An Asheville, NC investment property has an asking price of $540,000 and generates an annual NOI of $37,800. Is this price reasonable at a 7% cap rate?
Why Yes, the property is priced at $540,000 = $37,800 / 0.07 Is Correct
Answer D: Yes, the property is priced at $540,000 = $37,800 / 0.07
Exam Tip: Real Estate Math
Math questions are formula-based. Memorize the key formulas: commission splits, proration, cap rate (NOI ÷ Value), GRM (Price ÷ Gross Rent), and LTV (Loan ÷ Value). Practice converting between annual and monthly figures.
People Also Study
Related North Carolina Questions
- A property generates $18,000 annual net operating income and the market cap rate is 6%. What is the indicated value?Property Valuation
- A commercial property in NC generates annual NOI of $120,000. Similar properties sell at a 6.5% cap rate. What is the estimated market value?Real Estate Math
- A property is assessed at 80% of its $350,000 market value. The tax rate is $1.20 per $100 of assessed value. What are the annual taxes?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?Real Estate Math
- A NC investment property has an asking price of $650,000 and an NOI of $45,500. The implied cap rate is:Real Estate Math
- An appraiser is using the income approach to value a small apartment building. The property generates $96,000 annual gross income and has a 10% vacancy rate, operating expenses of $30,000, and a cap rate of 8%. What is the indicated value?Property Valuation
- A property in Raleigh, NC has a net operating income of $48,000 and the market capitalization rate is 8%. Its estimated value using the income approach is:Property Valuation
Key Terms to Know
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Math Concepts
Study This Topic
Practice More North Carolina Real Estate Questions
1,400+ questions covering all exam topics. Start free — no signup required.
Take the Free North Carolina Quiz →