Real Estate Math
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?
AYes, $37,800 / 0.07 = $540,000 — exactly at the asking price
BNo, the value at 7% cap rate is $540,000 which matches the asking price
CNo, at a 7% cap rate the value is $540,000 exactly — it is fairly priced
DYes, the property is priced at $540,000 = $37,800 / 0.07✓ Correct
Explanation
Value at 7% cap rate = $37,800 / 0.07 = $540,000. The asking price exactly equals the income-approach value at a 7% cap rate, indicating fair pricing at current market cap rates.
Related North Carolina Real Estate Math Questions
- A buyer in NC makes a 5% down payment on a $320,000 home. The down payment amount and loan amount are:
- A property has an annual NOI of $36,000 and a cap rate of 7.5%. What is its estimated value?
- A borrower in NC has a monthly PITI payment of $1,800 and a gross monthly income of $6,000. Their housing expense ratio is:
- A homeowner bought a NC property for $280,000 five years ago and is selling it for $350,000. The percentage increase in value is:
- A commercial property has an annual NOI of $84,000 and an asking price of $1,050,000. What is the capitalization rate?
- A property in Asheville is purchased for $380,000. The buyer puts down 15%. The loan amount is:
- A listing broker receives a 6% commission on the sale of a $350,000 home. The listing broker splits the commission 50/50 with the selling broker. How much does the listing broker receive?
- A NC home is appraised at $350,000. The buyer obtains an 80% LTV conventional loan. The down payment and loan amount are:
Practice More North Carolina Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free North Carolina Quiz →