Property Valuation
An appraiser in North Dakota values a Fargo warehouse using the income approach. The building generates $180,000 NOI and comparable cap rates are 8%. The indicated value is:
A$1,440,000
B$2,250,000✓ Correct
C$1,800,000
D$900,000
Explanation
Value = NOI ÷ Cap Rate = $180,000 ÷ 0.08 = $2,250,000. The income capitalization approach divides net operating income by the capitalization rate to estimate property value.
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