Real Estate Math
An Oregon rental property has an annual NOI of $42,000. If an investor applies a 7% cap rate, what is the estimated value?
A$294,000
B$600,000✓ Correct
C$420,000
D$504,000
Explanation
Value = NOI ÷ Cap Rate = $42,000 ÷ 0.07 = $600,000.
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