St Louis Real Estate Search

Cap Rate

real estate investment analysis

Cap rate is slang for Capitalization Rate, which is the most commonly used metric in the investment property assessment process.   The term relates to the rate with wich a property will pay for itself, and is cacluated with the following formula:

Cap Rate = Net Operating Income (NOI) / Value


Otherwise known as a way to quantify the rate of return, typically buyer's are looking for higher cap rates, in the neighborhood of 10-15% .  

5+ Family Investment Properties

Start Your Search