Practice & MathPregunta 92 de 100
A property owner wants a 12% annual return on a $250,000 investment. What annual net income must the property generate?
a.$25,000
b.$36,000
c.$30,000
d.$12,000
Explicación
Multiply the investment by the desired rate: $250,000 x 0.12 = $30,000 of annual net income needed. This is the inverse of the cap rate calculation, where income divided by value gives the rate. Investors use this to test whether a property meets their return target.
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