Capitalization Rate If Sold
Previously, in the Real Estate Financial Planner™ software we calculated the Capitalization Rate (often abbreviated Cap Rate) for each given Property as: Capitalization Rate = Current Net Operating Income ÷ Original Purchase Price And that was helpful—especially when trying to determine what the initial Cap Rate was at the time of purchase. We did provide a Chart of Cap Rate over time as well which was always the then current Net Operating Income divided by the original Purchase Price of the Property. However, there was not an easy way to see what the Cap Rate would be if someone purchased … Read more
