Real Estate Math

A Wyoming property has an NOI of $45,000 and the buyer wants a 9% cap rate. What is the maximum price the buyer should pay?

A$425,000
B$450,000
C$500,000✓ Correct
D$550,000

Explanation

Value = NOI ÷ Cap Rate = $45,000 ÷ 0.09 = $500,000.

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