Oycora methodology
Capitalization Rate (Cap Rate)
Annual NOI expressed as a percentage of purchase price.
How this is calculated
A higher or lower cap rate is not presented as a universal investment verdict.
Why it matters
Cap rate compares operating income with price without changing for the selected financing structure.
What is included
- Annual NOI
- Purchase price
What is excluded
- Debt service
- CapEx
- Closing costs
- Income taxes
- Appreciation
Assumptions and limitations
- Cap rate does not measure total return or determine whether a property is suitable for a user.
Used in Oycora
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