“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
“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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