Answer: 0.072
Explanation:
From the question, we are given the information that income property has a gross annual income of $14,250 and monthly expenses of $300 and that it has been valued at $147,000.
The capitalization rate will be calculated as:
= [$14, 250 - ($300 X 12)]/$147,000
= ($14,250 - $3,600)/$147,000
= $10650/$147,000
= 0.072
= 7.2%
