Calculating Cap Rate - first investment

[Aran Shinaar]

Hello BPs and thanks for those who answer my question.

I just purchased a single-family property in GA and wondered what is the right way to calculate its cap rate at the end of 2018. As far as I know the basic calculation is the purchase price divided by the NOI. I bought the house for 53k but then I had to pay for roof replacement (4.6k) and some repairs (6k - paint, cleaning, new appliances, insurance first two months payment and more). Should the roof replacement and other repairs mentioned be deducted from the NOI? I'm not sure if roof replacement (which is CapEx as far as I know) is considered an operating expense. Furthermore, there were some expenses such as house inspection that I wonder how do I add them to the equation.

Thanks again,

Aran

[Wayne Brooks]

Your roof repairs and initial repairs would be added to your purchase price as your basis. Insurance pmts and ongoing repairs/expenses would affect your noi.