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Updated over 12 years ago,

John Pitkin's profile image
John Pitkin's profile image
John Pitkin
  • Real Estate Investor
  • Member since Aug 16, 2008
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John Pitkin's profile image
John Pitkin's profile image
John Pitkin
  • Real Estate Investor
  • Member since Aug 16, 2008
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John Pitkin
  • Real Estate Investor
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4
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Multi-Family and Apartment Investing

Cap rate calculation

John Pitkin
  • Real Estate Investor
Posted

My understanding of cap rate calculation is NOI divided by the property cost or value. Recognizing that cost and value are not necessarily the same, I'm confused about which one to use in my calculations. When would it make sense use cost to calculate the cap rate? When should you use the value instead of the cost?

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