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Q » How do I calculate cap rate for a rental property?

Matthew

29 Oct, 2025

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A » To calculate the cap rate for a rental property, divide the property's net operating income (NOI) by its current market value. The formula is: Cap Rate = (NOI / Market Value) x 100. The NOI is the annual income generated by the property after deducting all operating expenses, excluding mortgage payments. This metric helps investors assess the potential return on investment for a property.

Michael

30 Oct, 2025

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A »To calculate cap rate, divide the property's annual net operating income (NOI) by its purchase price. For example, if the NOI is $50,000 and the purchase price is $500,000, the cap rate is 10%. This metric helps investors evaluate a rental property's potential return on investment.

David

30 Oct, 2025

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