Real Estate Math
A West Virginia investment property has an NOI of $30,000. If the capitalization rate in the market is 7.5%, what is the estimated value?
A$300,000
B$375,000
C$400,000✓ Correct
D$450,000
Explanation
Value = NOI ÷ Cap rate = $30,000 ÷ 0.075 = $400,000. To solve this, multiply the relevant values: $30,000 at 7.5%.. The correct answer is $400,000.. This is a common calculation on the West Virginia real estate exam.
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