What would be the net income when the value is $10,000 and the capitalization rate is 8%?

To determine the net income using the value and capitalization rate, the formula is:

Net Income = Value x Capitalization Rate

In this question, the value is $10,000 and the capitalization rate is 8%, which can be expressed as 0.08 in decimal form.

Now, applying the formula:

Net Income = $10,000 x 0.08 = $800

This calculation shows that the net income generated from the property value at the given capitalization rate is $800. This figure effectively represents the annual income that the investment is expected to yield based on its current market value and the specified rate of return. Understanding this relationship is crucial for appraisers and investors when evaluating the financial performance of real estate investments.