The CAP rate, or capitalization rate, is the unlevered return on a property, conveyed as a percentage of a property's market value. It is used in the income approach to real estate valuation. To calculate a property's market value, you will use a prevailing market CAP rate and the property's net operating income (NOI). Alternatively, to calculate a CAP rate, you will need a property's net operating income (NOI) and market value. For more on net operating income (NOI), see Calculating Multifamily NOI.
Calculate Market Value by CAP Rate
Calculate CAP Rate by Market Value