Category:
Real Estate
Capitalization Rate aka Cap Rate
An equation to estimate the potential return on an investment in the real estate market. Calculated by dividing net annual income by property market value.
Interested in investing in real estate? 
You’ll need to understand cap rates.
A property’s cap rate (or capitalization rate) is an estimate of its rate of return. To find a property’s cap rate, divide the net annual income you expect it to generate by its current market value.
Cap rates are a great tool for comparing properties, but they don’t tell the whole story! You also need to account for financing costs, management expenses, and more.
Are you searching for an investment property that will pay off? We can help! Contact us today for a free consultation.