Define cap rate?

How can I define how a cap rate relates to a particular property?
In Buying Property - Asked by Stan W. - May 9, 2011
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Answer(s)

Arash E.
Owner/Investor
Boynton Beach, FL

The cap rate is defined as the yearly net out income( gross rents - expenses) divided by the price of the property. For example if the property has a NOI of $80,000 and the price is $1,000,000 you get a cap rate of 8 percent

May 9, 2011
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JOHN R.
Broker/Agent
Tampa, FL

A CAP RATE IS DETERMINED BY DIVIDING THE NOI BY THE SALES PRICE.
JOHN REAVES

May 10, 2011
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Luis B.
Tenant
Lincoln, CA

.60 S/F

May 10, 2011
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Cory S.
Broker/Agent
Peoria, AZ

The cap rate is really just a snap shot of the property's first year return, assuming the buyer paid cash for the property. It does not take into account future cash flows and/or other items like depreciation, tax implications and incentives, or proceeds from a future sale of the property.

May 22, 2011
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Gregory G.
Broker/Agent
San Francisco, CA

CAP = NOI / Price
.
.
Gregory Garver - Commercial Real Estate Broker
Broker License #01716531
(415) 968-6065
greg@nnnbrokersusa.com
http://www.gregorygarver.com

Jun 11, 2011
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