Capitalization rate real estate term
Definition: Capitalization rate, commonly known as cap rate, is a rate that helps in evaluating a real estate investment. Cap rate = Net operating income / Current Definition: Capitalization rate defines the percentage number used to determine the current value of a property based on estimated future operating income. 3 Oct 2018 In the commercial real estate industry, it is common to say that this property sold at a 5.8% cap rate. Intuition Behind the Cap Rate. What is the cap