Capitalization Rate
InvestingA real estate valuation metric calculated by dividing net operating income by the property's current value.
Example
Example: Consider an investor building a $100,000 portfolio. Capitalization Rate — a real estate valuation metric calculated by dividing net operating income by the — directly affects investment strategy and long-term returns. Getting this concept right can mean tens of thousands of dollars in difference over a 20-year period. Model your portfolio with our investment calculator.