Real Estate Math
A property has a monthly NOI of $3,500. At a 7% annual cap rate, what is the estimated value?
A$450,000
B$500,000
C$600,000✓ Correct
D$650,000
Explanation
Annual NOI = $3,500 × 12 = $42,000. Value = $42,000 / 0.07 = $600,000. To solve this, multiply the relevant values: $3,500 at 7%.. The correct answer is $600,000.. This is a common calculation on the Ohio real estate exam.
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