Real Estate Math
A Virginia investment property has a NOI of $48,000 per year. If an investor requires a 7.5% cap rate, what is the maximum price to pay?
A$480,000
B$560,000
C$600,000
D$640,000✓ Correct
Explanation
Value = NOI ÷ Cap Rate = $48,000 ÷ 0.075 = $640,000. To solve this, multiply the relevant values: $48,000 at 7.5%.. The correct answer is $640,000.. This is a common calculation on the Virginia real estate exam.
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