CAP Rate
hi,
how to calculate CAP rate?
if the purchase price is $100,000, annual net operating income is $5,000. then the cap rate is 5%?
how to calculate the net operating income?
annual rental revenue: 8000
repair: $2000
tax: $500
insurance: $500
Net operating income is: $5000.
am i right?
too many things to take into consideration.
[ Edited by pydfg5 on Date 05/03/2006 ]
Both correct- although there will be more items deducted from your gross income to get the net- but I think you know that.
Chris
http://www.thecreativeinvestor.com/residential/modules.php?name=Articles&file=article&articleid=467