BC Real Estate Trading Services Licensing Exam Practice · Question
A commercial building in downtown Vancouver was recently sold for $5,500,000. It generates a Net Operating Income (NOI) of $385,000 annually. What is the capitalization rate for this property?
The capitalization rate is calculated by dividing the Net Operating Income (NOI) by the property's sale price. In this case, $385,000 / $5,500,000 = 0.07 or 7.0
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Question: A commercial building in downtown Vancouver was recently sold for $5,500,000. It generates a Net Operating Income (NOI) of $385,000 annually. What is the capitalization rate for this property?
Answer options: ✅ 7.0%
- 14.29%
- 5.5%
- 8.5%
Correct answer: 7.0%
Explanation: The capitalization rate is calculated by dividing the Net Operating Income (NOI) by the property's sale price. In this case, $385,000 / $5,500,000 = 0.07 or 7.0%.
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Question explanations
- A developer, Grandview Developments Ltd., plans to build a new condominium project in Kelowna. They register a
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