Try answering this question.
The list price for a duplex at 1234 Any street, Anytown is $575,000 and its NOI (net operating income) is estimated at $30,150 pa (per annum) based on its existing leases and revenue streams.
You expect to incur some additional closing costs including land transfer tax estimate ($7,975), legal fees on completion ($1,100) and title insurance and other closing costs/disbursements ($675).
Hence, its going in/as is, where is cap rate is:
a) 5.2% pa?
b) 4.2% pa?
c) 6.2% pa?
Answer is shown below my signature π
Prof Bruce
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ANSWER: 5.2%
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