The rate of return on net operating income considered acceptable for an investor and used to determine the capitalized value This rate should provide a return on, as well as a return of, capital Also knows as "cap rate"
The capitalization rate (or "cap" rate) for a property is determined by dividing the property's net operating income by its purchase price Generally, high cap rates indicate higher returns and greater perceived risk
The rate of interest which is considered a reasonable return on the investment It is used in the process of determining value based upon net income
The relationship between the net income from a real estate investment and the present value
The rate of return on net operating income considered acceptable for an investor A rate of return used to derive the capital value of an income stream The formula is Value = annual income divided by the capitalization rate Also known as cap rate
The rate used to convert an income stream to a present value, which can be used to estimate the value of real estate under the income approach to value
The rate that is considered a reasonable return on investment (on the basis of both the investor's alternative investment possibilities and the risk of the investment) Used to determine and value real property through the capitalization process Also called "free and clear return" See "Capitalization"
The percentage (acceptable to an average buyer) used to determine the value of income property through capitalization
The rate that is considered a reasonable return on and of investment (on the basis of both the investors alternative investment possibilities and the risk of the investment) Used to determine and value real property through the capitalization process Also called "free and clear return " See "Capitalization "
{i} Cap Rate, interest rate for calculating the present value; method for converting an estimate of income expectancy of one a single year into an indication of value in one direct step by dividing the income estimate by a proper rate
The percentage rate applied to the income a property is expected to produce to derive an estimate of the property's value; includes both an acceptable rate of return on the amount invested (yield) and return of the actual amount invested (recapture)
an interest rate for a property that reflects the relationship between its annual net income expectancy and total property value; it is used to convert the property's net operating income into an indication of overall property value