Read my BLOG
How to calculate Capitalization Rate for Real Estate
1. Determine the Purchase Price of your Real Estate Investment, such as a Vacation Rental property.
- Vacation Rental Price = $850,000
2. Determine the NET operating income, realized by the property owner.
- NET Income (after expenses) = $42,500
3. Divide the Net Operating Income by the Properties’ Purchase Price to get Capitalization Rate.
- $42,500 / $850,000 = .05 or 5% (Cap Rate)
Contact Me Today
for help Buying or Selling a Vacation Rental