What does Cap Rate mean?

This is a measure of the expected return on an investment in real estate. It is calculated by dividing the net operating income of a property by its current market value. A high cap rate generally indicates that the property is expected to generate a high return, while a low cap rate suggests a lower expected return.

Related Terms

Low-Down-Payment Loan Purchase-Money Mortgage Straight Purchase Creditor Specifications Basis Point Federal Housing Administration ( FHA) Fixed-rate mortgage Employer-Assisted Housing Yield Rate Bargain Sale Agent Lock-In Domed Ceiling Property disclosure Excavation Punch List Cancellation agreement