Real Estate Math
A Washington investment property is purchased for $875,000 with NOI of $61,250. The cap rate is:
A6.0%
B6.5%
C7.0%✓ Correct
D7.5%
Explanation
Cap rate = $61,250 ÷ $875,000 = 0.07 = 7.0%. Using the values given ($875,000, $61,250), apply the appropriate formula.. The correct answer is 7.0%.. This is a common calculation on the Washington real estate exam.
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