What is capitalisation rate in property valuation
Investing in real estate can be a tricky prospect, so it makes sense to try to determine how profitable a given property is likely to be. That's where the capitalization rate comes into play. Definition: The capitalization rate (cap rate) indicates the potential rate of return on a real estate investment, taking into account the income that the property is likely to generate by comparing the property value and it’s NOI. What Does Capitalization Rate Mean? What is the definition of capitalization rate? The cap rate is one of the most