WHAT IS A CAP RATE IN REAL ESTATE? - By Kate Crhistensen - REALWEALTH Network
WHAT IS A CAP RATE IN REAL ESTATE? - By Kate Crhistensen - REALWEALTH Network ( https://www.realwealthnetwork.com/learn/what-is-cap-rate-in-real-estate/ ) Summary : In this article, you will learn what is cap rate in real estate. Topics include, when to use capitalization rate, how to calculate cap rates, what is considered a good cap rate on investment properties, and why determining cap rates is important for real estate investors. Table of Contents Introduction Cap Rate Definition When to Use Cap Rate When Not to Use Cap Rate How to Calculate a Cap Rate How to Calculate NOI Why is Cap Rate Important? Using Cap Rate to Compare Properties Cap Rate Focuses on the Property, Not Financing Using Cap Rate to Measure Risk What is a Good Cap Rate? Factors that Affect Cap Rate Limitations of Cap Rate Cap Rate vs. ROI Example of Calculating ROI with Cash Purchase Example of Calculating ROI with Financing Conclusion Introduction Capitalization rate is