Question

A property has a net operating income of $65,000, a market rate mortgage payment for $10,000 and the property capitalization rate used in the market is 8%. What is the indicated value?

a.$938.000
b. $5,500,000
c. $250,000
d.$687,000
e.$813,000
f. $550,000

Answer 1

Answer: The answer is (d) $687,000

Explanation: 65,000 - 10,000 = 55,000

55,000 / 8% = 687,000