Property Valuation
A property generates a net operating income of $90,000 and is valued at $1,200,000. What is the capitalization rate?
A6.5%
B7.5%✓ Correct
C8.5%
D9.5%
Explanation
Cap rate = NOI ÷ Value = $90,000 ÷ $1,200,000 = 0.075 = 7.5%. The cap rate represents the investor's expected rate of return based on the property's income relative to its value.
Related Oregon Property Valuation Questions
- What is 'assemblage' versus 'plottage' in Oregon real estate?
- In real estate appraisal, the term 'market value' is best defined as:
- An appraiser is comparing two Oregon properties: one on the east side of Portland (valued at $450,000) and one on the west side (valued at $650,000). The higher west-side value likely reflects:
- Economic obsolescence (external obsolescence) differs from functional obsolescence in that economic obsolescence:
- An appraiser performing a 'drive-by' or exterior-only appraisal produces what type of report?
- Which of the following Oregon property types would MOST likely be appraised primarily using the cost approach?
- Under the cost approach, 'accrued depreciation' refers to:
- The principle of 'highest and best use' in real estate appraisal requires that the use be:
Practice More Oregon Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Oregon Quiz →