Real Estate Math
A property generates $48,000 NOI. Comparable properties in the market sell at an 8% cap rate. Using the income approach, the property is worth approximately:
A$550,000
B$600,000✓ Correct
C$620,000
D$580,000
Explanation
Value = NOI ÷ Cap rate = $48,000 ÷ 0.08 = $600,000. To solve this, multiply the relevant values: $48,000 at 8%.. The correct answer is $600,000.. This is a common calculation on the Oregon real estate exam.
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