Real Estate Math
A Pennsylvania income property has an annual NOI of $48,000. If the market cap rate for similar properties is 6%, what is the estimated value using the income approach?
A$288,000
B$480,000
C$800,000✓ Correct
D$2,880,000
Explanation
Income Approach Value = NOI divided by Cap Rate = $48,000 divided by 0.06 = $800,000.
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