Saturday, May 18, 2013

Old Timer

How is the cap rate calculated”? 
The simple formula for estimating Market Value for a real estate assets using the Income Approach is:
Market Value (MV)=Stabilized Net Operating Income (NOI)
 Overall Capitalization Rate (OCR)
Expressed another way, if you’re trying to estimate what cap rate a particular property sold for, then:
OCR=Net Operating Income
 Purchase Price

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