CAP Rate, or capitalization rate, in its most simplest form is equivalent to the annual net operating income divided by the property's purchase price OR the property's current value.
There are many ways available to calculate a Capitalization Rate. When receiving a CAP rate value from a seller, always ask what is or was included in the calculation. I believe the majority of all expenses are included in the below CAP Rate calculator, with the exception of loan interest and payments on a purchase price. Additional details regarding how CAP rate is calculated coming soon.
There are many ways available to calculate a Capitalization Rate. When receiving a CAP rate value from a seller, always ask what is or was included in the calculation. I believe the majority of all expenses are included in the below CAP Rate calculator, with the exception of loan interest and payments on a purchase price. Additional details regarding how CAP rate is calculated coming soon.