Contents tagged with Cap rate
today I want to document some terms related to real estate investment with simple words.
NOI or Net operating income
NOI or net operating income is income after all expances but before morgage payment ( in case of real estate ).
Cap rate or capitalization rate is something which says what profit you'll get in percentage from benefiting something that you use during one year.
I assume with example it will be easier to understand.
Suppose, you want to buy a flat which you plan to give as a rent for others.
You pay for buying a flat 40 000$. Monthly rent of flat income after paying all bills is 350$. What is cap rate ( capitalization rate )? Below goes the … more