Real Estate Math
A Rhode Island commercial property has a 7% cap rate and generates $105,000 in annual NOI. What is the property's value?
A$1,200,000
B$1,350,000
C$1,500,000✓ Correct
D$1,600,000
Explanation
Value = NOI / Cap Rate = $105,000 / 0.07 = $1,500,000.
People Also Study
Related Rhode Island Questions
- 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 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 commercial building has a GIM (Gross Income Multiplier) of 8 and annual gross income of $120,000. What is the indicated value?Real Estate Math
- A Rhode Island assessor values property for property tax purposes. Assessed value in Rhode Island is typically:Property Valuation
- When a Rhode Island appraiser estimates the value of a duplex using the gross rent multiplier method, they divide the sale price of comparables by their annual gross rents to derive the GRM. The subject property has annual gross rents of $30,000 and the market GRM is 12. What is the indicated value?Property Valuation
- 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
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 →