• Calculate Capitalization Rate for Real Estate Tips
    1. Get the recent sold price of an income property, such as an apartment complex.

    Example: 1 unit apartment project sold for $500,000

    2. For that same apartment project, determine the net operating income, or the net rentals realized by the owners.

    Example: The rental income after expenses (net) is $50,000

    3. Divide the net operating income by the sale price to get cap rate.

    Example: $50,000 / $500,000 = 0.1 or 10% (The Capitalization Rate)

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