Real Estate Math
A property's net operating income is $45,000 and it was purchased for $600,000. What is the capitalization rate?
A6.5%
B7%
C7.5%✓ Correct
D8%
Explanation
Cap Rate = NOI ÷ Value = $45,000 ÷ $600,000 = 0.075 = 7.5%.
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