Real Estate Math
A Memphis rental home has monthly gross income of $1,800 and monthly expenses of $750. Using a 10% cap rate, what is the property's estimated value?
A$126,000✓ Correct
B$216,000
C$180,000
D$108,000
Explanation
Annual NOI = ($1,800 − $750) × 12 = $1,050 × 12 = $12,600. Value = NOI ÷ Cap rate = $12,600 ÷ 0.10 = $126,000.
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