Question: Consider the table. Assume that the subject property has effective gross income of $53,000 and a NOI of $27,500. What value would a cap rate
Consider the table. Assume that the subject property has effective gross income of $53,000 and a NOI of $27,500. What value would a cap rate approach yield (rounded to the nearest $100)?
| Comp 1 | Comp 2 | Comp 3 | ||||||
Price | $ | 300,000 |
| $ | 350,000 |
| $ | 375,000 |
|
Effective gross income |
| 50,000 |
|
| 55,000 |
|
| 60,000 |
|
% operating expense |
| 50 | % |
| 55 | % |
| 54 | % |
NOI | $ | 25,000 |
| $ | 24,750 |
| $ | 27,600 |
|
| |||||||||
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To calculate the cap rate you can use the formula textCap Rate fracNet Operating Income NOIProperty ... View full answer
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