Property Valuation
A Virginia income-producing property has a NOI of $85,000 and sells for $1,000,000. What is the cap rate?
A7.5%
B8.5%✓ Correct
C9.5%
D10%
Explanation
Cap rate = NOI ÷ Value = $85,000 ÷ $1,000,000 = 0.085 = 8.5%. Using the values given ($85,000, $1,000,000), apply the appropriate formula.. The correct answer is 8.5%.. This is a common calculation on the Virginia real estate exam.
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