Real Estate Math
A Tennessee property has an annual NOI of $38,500 and is offered for sale at $495,000. What is the implied cap rate?
A7.78%✓ Correct
B6.5%
C8.5%
D7.0%
Explanation
Cap rate = NOI ÷ Purchase price = $38,500 ÷ $495,000 = 7.78%.
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