Capitalization Rate = Amount Produced / Property SOld for
= $ 183,500 / $2,720,000
= 0.0675 i.e 6.75%
Capitalization Rate is 6.75%
Calculate the capitalization rate implied by a property which produces $183,500 in NOI being sold for...
QUESTION 35 What is the capitalization rate? / / Property 1 Property 2 Property 3 Subject / NOI 82,000 75,000 94,000 60,000 EGI 122,000 111,500 140,000 108,000 Selling Price 1,250.600 1,146,300 1,433,600 / / 0.047 0.115 0.066 0.097
QUESTION 11 If the value of a property is $12,222,222.00, and the NOI is $550,000.00, what is the implied cap rate? 04.0% O 4.596 5.0% 5.5%
8. A property has Net Operating Income (NOI) of $130,000 and is offered for sale at $1,950,000. What Capitalization Rate did the seller use to price the property? Capitalization Rate: 130000/1950000=0.06667=6.67% 9. You have a Required Return of 7.66%. What would you offer for the property in the previous question?
Which of the following choices best describes the elements needed to calculate a capitalization rate? a. Property value, gross rental income, depreciation b. Property value, rental income, operating expenses, capital expenses c. Property value, effective gross income, general expenses d. Property value, rental income, rental profit taxes
What is the present value of a property with next year's NOI of $100,000, which will grow at 3% per year and discounted at a rate of 8%? Use PV=FV/e^Tk
Which of the following income capitalization techniques is based on the principle that buyers will not pay more for a property than the present value (PV) of all future Net Operating Incomes (NOI)? A. Multiple Choice Direct capitalization method B. Effective gross income method C. Potential gross income method D. Discounted cash flow method
A property is being purchased that requires some renovation to be competitive with otherwise comparable properties. If it were already renovated, it would have NOI of $23 million next year, which would be expected to increase by 2 percent per year thereafter. Investors would normally require a 9 percent IRR (discount rate) to purchase the property after it is renovated. Because of the renovation, the NOI will only be $17 million next year. But after that, the NOI is expected...
A) The capitalization rate, “cap rate” measures the annual net operating income of a commercial property relative to its market value. True or False B) You are searching for a commercial property to buy in Brooklyn. You have narrowed your search down to three properties. Property (1) has a cap rate of 7, property (2) has a cap rate of 8, and (property (3) has a cap rate of 6. Property (3) must be the better choice because the cap...
#1 MULTIPLE CHOICE (no need to show work but please get right) 1. A property has a net operating income of $25,000 and the capitalization rate used in the market is 10%. What is the indicated value? a) $250,000 b) $300,000 c) $325,000 d) $2,500,000 2. A property sold for $555,000. The buyer anticipated that the potential gross income (PGI) would be $93,000, the vacancy would be 5%, and expenses would be 35% of the effective gross income (EGI) in...
Render an opinion/analysis of the assessment and taxes on a property which your employer is about to acquire. Provide a detailed, illustrated analysis of the assessment and taxes and render an opinion of whether they are appropriate. Whatever you conclude explain the economics and your conclusion. The facts are as follows: the equalization rate is 18.988%; the capitalization rate is 9%; the NOI is $628,992; and the tax rate is $1,288.98912 per $1000 of assessed value and the assessment is...