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Finance · Real Estate

Cap Rate

Noun
US US /kæp reɪt/ GB UK /kæp reɪt/
Finance Real Estate intermediate

Definition

Net Operating Income divided by property value — measures real estate investment return.

Visual Reference

Cap Rate illustration

Detailed Explanation

Building explanation…

Example

Cap Rate is essential when evaluating property investments and mortgage decisions.

In Practice

Also known as: Capitalization Rate. Closely related to Rental Yield, NOI.

Video Explanation

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Case Study

Cap Rate - key concept in Real Estate.

Word Usage

Commercial real estate; Investment comparison; Property valuation

Finance Real Estate

Use Case

Applied in Real Estate contexts: Commercial real estate; Investment comparison

Also Known As

real-estate

Synonyms

Capitalization Rate

Related Terms

Rental YieldNOIReal EstateReturn
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