Property Valuation
What is the income capitalization formula?
AValue = NOI x Cap Rate
BValue = NOI / Cap Rate✓ Correct
CValue = Cap Rate / NOI
DValue = NOI + Cap Rate
Explanation
The income capitalization formula is: Value = NOI / Cap Rate. For example, a property with $60,000 NOI and an 8% cap rate has a value of $60,000 / 0.08 = $750,000.
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