Real Estate Math
A Vermont investment property has a capitalization rate of 7% and an NOI of $35,000. What is the indicated value?
A$420,000
B$450,000
C$500,000✓ Correct
D$550,000
Explanation
Value = NOI / Cap Rate = $35,000 / 0.07 = $500,000. To solve this, multiply the relevant values: $35,000 at 7%.. The correct answer is $500,000.. This is a common calculation on the Vermont real estate exam.
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