Cap Rate (Capitalization Rate)

Definition

A metric used in real estate to indicate the rate of return that is expected to be generated on a real estate investment property.

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Cap Rate Calculator

Formula: Cap Rate = Net Operating Income / Current Market Value.

It represents the yield of a property over a one-year time horizon assuming the property is purchased on cash and not on loan.

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This tool is for illustrative purposes only and does not constitute professional financial, tax, or legal advice. Calculations are estimates and may not reflect real-world variables or local regulations. Always consult with a qualified professional before making financial decisions.