Given the Following Information, Calculate the Capitalization Rate for the Following

question 32

Multiple Choice

Given the following information, calculate the capitalization rate for the following apartment complex. Number of apartments: 15; Market Rent (per month) : $1,000; Vacancy and Collection Loss: 10% of potential gross income; Operating Expenses: 5% of effective gross income; Capital Expenditures: 10% of effective gross income; Acquisition Price: $1,710,000.

• A) 8.1%
• B) 9.0%
• C) 9.5%
• D) 10.5%

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