Real Estate Math
A Rhode Island commercial property has $180,000 NOI and a 7.5% cap rate. What is its value?
A$2,100,000
B$2,400,000✓ Correct
C$2,700,000
D$3,000,000
Explanation
Value = NOI / Cap Rate = $180,000 / 0.075 = $2,400,000.
People Also Study
Related Rhode Island Questions
- A Rhode Island commercial property has a 7% cap rate and generates $105,000 in annual NOI. What is the property's value?Real Estate Math
- A Rhode Island property has an assessed value of $195,000. The property tax rate is $14.20 per $1,000 of assessed value. What is the annual property tax?Real Estate Math
- A Rhode Island assessor values property for property tax purposes. Assessed value in Rhode Island is typically:Property Valuation
- A Rhode Island property generates $60,000 in annual net operating income. If the cap rate for comparable properties is 6%, what is the indicated value?Property Valuation
- A Rhode Island property has an assessed value of $220,000. The tax rate is $14.50 per $1,000 of assessed value. What is the annual property tax?Real Estate Math
- A Rhode Island commercial property generates $120,000 annual NOI. If it sells for $1,500,000, what is the cap rate?Real Estate Math
- A Rhode Island property manager negotiates a lease renewal for a commercial tenant at a higher rate. This is an example of the manager's duty of:Property Management
- What is a 'common area maintenance' (CAM) charge in Rhode Island commercial leases?Property Management
Key Terms to Know
Capitalization Rate (Cap Rate)
A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
Study This Topic
Practice More Rhode Island Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Rhode Island Quiz →