Real Estate MathMixed_practiceMEDIUM
An investment property generates $42,000 in annual net operating income. An investor wants a 7 percent return. Using the income capitalization approach, what is the property's value?
Correct Answer
D) $600,000
Value = NOI / Cap rate = $42,000 / 0.07 = $600,000.
Answer Options
A
$2,940B
$420,000C
$294,000D
$600,000Why This Is the Correct Answer
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Why the Other Options Are Wrong
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Deep Analysis of This Real Estate Math Question
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Background Knowledge for Real Estate Math
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Real World Application in Real Estate Math
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Related Topics & Key Terms
Key Terms:
income_approachcap_rateNOIcalculationreal_estate_math
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