Property Valuation
A property's annual NOI is $42,000 and similar properties are selling at a 7% cap rate. What is the estimated value?
A$500,000
B$550,000
C$600,000✓ Correct
D$650,000
Explanation
Value = NOI / Cap Rate = $42,000 / 0.07 = $600,000. To solve this, multiply the relevant values: $42,000 at 7%.. The correct answer is $600,000.. This is a common calculation on the Ohio real estate exam.
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