Real Estate Math
A Utah investor's property has a 7% cap rate. If NOI increases by $5,000, how much does the property value increase?
A$5,000✓ Correct
B$35,000
C$50,000
D$85,000
Explanation
Value increase = Change in NOI ÷ Cap Rate = $5,000 ÷ 0.07 ≈ $71,429. To solve this, multiply the relevant values: $5,000, at 7%.. The correct answer is $5,000.. This is a common calculation on the Utah real estate exam.
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