Real Estate Math
An investor receives a $14,400 annual net income on a $180,000 investment. What is the capitalization rate?
A6%
B7%
C8%✓ Correct
D9%
Explanation
Cap rate = NOI / Value = $14,400 / $180,000 = 0.08 = 8%. Using the values given ($14,400, $180,000), apply the appropriate formula.. The correct answer is 8%.. This is a common calculation on the Oklahoma real estate exam.
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