{"id":180,"date":"2012-06-27T07:38:59","date_gmt":"2012-06-27T12:38:59","guid":{"rendered":"http:\/\/www.RealEstateAnalysisFREE.com\/blog\/?p=180"},"modified":"2021-04-23T06:33:52","modified_gmt":"2021-04-23T11:33:52","slug":"capitalization-rate-cap-rate","status":"publish","type":"post","link":"https:\/\/www.zilculator.com\/blog\/capitalization-rate-cap-rate\/","title":{"rendered":"Capitalization Rate (Cap Rate)"},"content":{"rendered":"<p><strong>Capitalization rate (cap rate)<\/strong> is in fact the \u201cdiscount rate\u201d, used for discounting the future income to determine its present value. There are two main purposes for which cap rate can be calculated and used.<\/p>\n<p>We can calculate property\u2019s cap rate and then compare it with other similar properties in a certain area. Capitalization rate is calculated as ratio of the <strong>net operating income<\/strong> and the value of the property and NOI has to be constant in time for this calculation.<\/p>\n<!-- WP QUADS Content Ad Plugin v. 2.0.17 -->\n<div class=\"quads-location quads-ad2\" id=\"quads-ad2\" style=\"float:none;margin:0px;\">\n\n <!-- WP QUADS - Quick AdSense Reloaded v.2.0.17 Content AdSense async --> \n\n\n<script type=\"text\/javascript\" >\nvar quads_screen_width = document.body.clientWidth;\nif ( quads_screen_width >= 1140 ) {document.write('<ins class=\"adsbygoogle\" style=\"display:inline-block;width:550px;height:90px;\" data-ad-client=\"pub-3164542121802998\" data-ad-slot=\"4497930067\" ><\/ins>');\r\n            (adsbygoogle = window.adsbygoogle || []).push({});\r\n            }if ( quads_screen_width >= 1024  && quads_screen_width < 1140 ) {document.write('<ins class=\"adsbygoogle\" style=\"display:inline-block;width:550px;height:90px;\" data-ad-client=\"pub-3164542121802998\" data-ad-slot=\"4497930067\" ><\/ins>');\r\n            (adsbygoogle = window.adsbygoogle || []).push({});\r\n            }if ( quads_screen_width >= 768  && quads_screen_width < 1024 ) {document.write('<ins class=\"adsbygoogle\" style=\"display:inline-block;width:550px;height:90px;\" data-ad-client=\"pub-3164542121802998\" data-ad-slot=\"4497930067\" ><\/ins>');\r\n            (adsbygoogle = window.adsbygoogle || []).push({});\r\n            }if ( quads_screen_width < 768 ) {document.write('<ins class=\"adsbygoogle\" style=\"display:inline-block;width:550px;height:90px;\" data-ad-client=\"pub-3164542121802998\" data-ad-slot=\"4497930067\" ><\/ins>');\r\n            (adsbygoogle = window.adsbygoogle || []).push({});\r\n            }\n<\/script>\n\n <!-- end WP QUADS --> \n\n\n<\/div>\n\n<p><img loading=\"lazy\" class=\"aligncenter\" src=\"\/images\/blog\/cap_rate.gif\" alt=\"\" width=\"540\" height=\"65\" \/><\/p>\n\n\n<p><strong>Note:<\/strong> Zilculator published a new LEARN section with an updated article including <a href=\"https:\/\/www.zilculator.com\/real-estate-analysis\/calculate-cap-rate-formula-excel-example\">Cap Rate excel template<\/a>.\n","protected":false},"excerpt":{"rendered":"<p>Capitalization rate (cap rate) is in fact the \u201cdiscount rate\u201d, used for discounting the future income to determine its present value. There are two main purposes for which cap rate&#8230;<\/p>\n","protected":false},"author":1,"featured_media":68953,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[6],"tags":[12,68],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v15.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Capitalization Rate (Cap Rate) | Zilculator: Real Estate Investment Analysis blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.zilculator.com\/blog\/capitalization-rate-cap-rate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Capitalization Rate (Cap Rate) | Zilculator: Real Estate Investment Analysis blog\" \/>\n<meta property=\"og:description\" content=\"Capitalization rate (cap rate) is in fact the \u201cdiscount rate\u201d, used for discounting the future income to determine its present value. 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