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how to determine cap rate on rental property

1Answers

McAna

11/28/2025, 06:51:57 AM

The capitalization rate, often called the cap rate, is determined by dividing a property's annual net operating income (NOI) by its market value. It serves as a key metric for real estate investors to assess potential returns, compare investment opportunities, and gauge the risk and profitability of a property before purchase.

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