A property has an NOI of $50,000 and a cap rate of 5%. What is the value?
Correct Answer
C) $1,000,000
Value = NOI ÷ Cap Rate. $50,000 ÷ 0.05 = $1,000,000.
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Related Concepts
IRV stands for Income, Rate, and Value. It represents the relationship between Net Operating Income (I), Capitalization Rate (R), and Property Value (V).
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