Comments on: What is NetGain’s prediction for interest rates in 2008? http://www.netgainrealestate.com/what-is-netgains-prediction-for-interest-rates-in-2008 Commercial real estate investing and income property analysis Thu, 09 Sep 2010 03:40:21 +0000 http://wordpress.org/?v=2.5 By: NetGain http://www.netgainrealestate.com/what-is-netgains-prediction-for-interest-rates-in-2008#comment-117 NetGain Sat, 12 Jul 2008 06:57:27 +0000 http://www.netgainrealestate.com/what-is-netgain%e2%80%99s-prediction-for-interest-rates-in-2008/#comment-117 The formula for computing a capitalization rate is the NOI ($27,000) divided by the purchase price ($350,000). In the example above, the capitalization rate is 7.7%. The capitalization rate is the yield generated by an income property without consideration of a mortgage. Without the complexities of different mortgages, the capitalization rate places income properties more on a parity for value comparisons to other properties as well as other types of investments. The formula for computing a capitalization rate is the NOI ($27,000) divided by the purchase price ($350,000). In the example above, the capitalization rate is 7.7%.

The capitalization rate is the yield generated by an income property without consideration of a mortgage. Without the complexities of different mortgages, the capitalization rate places income properties more on a parity for value comparisons to other properties as well as other types of investments.

]]> By: ILene http://www.netgainrealestate.com/what-is-netgains-prediction-for-interest-rates-in-2008#comment-115 ILene Fri, 11 Jul 2008 22:16:39 +0000 http://www.netgainrealestate.com/what-is-netgain%e2%80%99s-prediction-for-interest-rates-in-2008/#comment-115 If the NOI is 2,750 purchase price is 350,000 What is the CAP Value? 350,000 Divided by 27,000 OR 27,000 Divided by 350,000 ? ILene If the NOI is 2,750
purchase price is 350,000
What is the CAP Value?

350,000 Divided by 27,000
OR
27,000 Divided by 350,000
?

ILene

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