Real Estate Math

A Wyoming commercial property has a net operating income of $72,000 per year. Using a cap rate of 8%, what is the estimated value of the property?

A$576,000
B$900,000✓ Correct
C$5,760,000
D$720,000

Explanation

Value = NOI ÷ Cap Rate = $72,000 ÷ 0.08 = $900,000.

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