Today on the Finance Flash Go! podcast, let’s chat about capitalization rates.
Capitalization rates, or cap rates, come into play when discussing real estate investing.
Basically, the cap rate is a measure of return that you receive from an investment property.
Mathematically, it is equal to your net operating income (NOI) divided by the price that you bough the property for. And NOI is equal to your income from the property minus all expenses EXCEPT mortgage principal and interest.
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