Calculating the change in Property value with NOI and Cap rates
Not experienced with investing/ownership side of CRE. I am looking to calculate the change in value of the property and want to ensure I am not missing anything as to how it is calculated. 

I understand, property value = (Net Annual NOI) / Cap rate. 

Here's an example, I am trying to work out and would like to calculate the new Property value. 

https://preview.redd.it/s3aok7tbcbm51.png?width=257&amp;format=png&amp;auto=webp&amp;s=935f8e799d1b98c4eecb053f12e5d17da7df977c

In the above table, 8% cap rate and 400k NOI, Property value = 5m. If my NOI changes increases by 5%, what the new prop val and cap rate? Are there other factors to consider here or it's fairly straight forward as NOI / Cap rate?
[{"id": "g4o9s2y", "text": "Theres nothing in this post to indicate that the cap rate should change. So yeah, just divide the new NOI by the same 8%.\n\nDirect capitalization can be helpful as a general guide to property value but it only really works in specific cases. Again, you haven't given us anything to determine if direct cap is appropriate for your property.", "replies": [{"id": "g4ob3xa", "text": "Got it. The new property val is 5,250,000. Does the new cap rate remain the same? i.e 8%?", "replies": [{"id": "g4odjlj", "text": "What factors led you to pick 8% as the cap rate in the first place? Did any of them change? If not, then the cap rate should probably stay the same.", "replies": [{"id": "g4oeqzj", "text": "In this case, only NOI changed and therefore Property value. Assume nothing else changes.", "replies": [], "depth": 4}], "depth": 3}, {"id": "g4rmqrk", "text": "There are several ways to look at cap rates, and it often depends on from which perspective you are looking.  There are market extracted capitalization rates (comparable sales), or it can be calculated using band of investment method, or building up from the discount rate, or using the lender's method.  The following article does a good job describing several of these:\n\n&amp;#x200B;\n\n[https://propertymetrics.com/blog/how-to-calculate-cap-rate/](https://propertymetrics.com/blog/how-to-calculate-cap-rate/)", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g4obzo4", "text": "Well both change.  \n\n\nAre you looking at an operating Cap Rate?  Which means the cap rate that the park is operating on now versus when you bought it?  Often used as a measure of success in the endeavor:  \n\n\n  \n\n\n|Purchase Price|5,000,000|Stays the same, you aren't trying to actually access the capitalized value of the OI|\n|:-|:-|:-|\n|NOI|420,000||\n|***Cap Rate***|***8.4%***||\n\n&amp;#x200B;\n\nIf you are trying to decide how much capital you can access you go the other way\n\n&amp;#x200B;\n\n|*Purchase Price*|*5,250,000*||\n|:-|:-|:-|\n|NOI|420,000||\n|Cap Rate|8.0%|Stays the same, because you are trying see how much capital you've actually created|\n\n&amp;#x200B;\n\nIt should be said that if 8% is the market cap rate for your asset then all of this good.  But if Market rate is 5% and you've added value by decreasing vacancy or spending capex it might actually bring your cap rate down too.", "replies": [{"id": "g4odmvq", "text": "Yeah, operating cap rates. \n\nIn my example they're the same property, just that there is a appreciation in value of the property, say in, year 2. \n\nNOI increased by 5%, and so did property value from 5m to 5.25m. but cap rates remain the same at 8%.", "replies": [{"id": "g6vo0vd", "text": "There is no such thing as operating cap rates.  Cap rates measure what investors have paid for stabilized properties.  \n\nThere is only one [cap rate](https://www.biggerpockets.com/rei/glossary/capitalization-rate-aka-cap-rate?itm_source=ibl&amp;itm_medium=autof&amp;itm_campaign=glossary) and that is what similar properties that are stabilized have sold for. But you have an in place NOI and a pro forma NOI. If stabilized properties are selling at a 10% cap rate and the property could generate $100,000 NOI then the property could be worth $1,000,000. $100,000/10%= $1,000,000. But you are not stabilized so you would factor in the expense to get the property stabilized, the lost rents up to that point and a risk factor. That amount would then be deducted as a below the line adjustment from the $1,000,000. Say if that number was $150,000 then $850,000 would be a good [offer](https://www.biggerpockets.com/rei/glossary/offer?itm_source=ibl&amp;itm_medium=autof&amp;itm_campaign=glossary) price.\n\nSome people want to capitalize in place NOI but that over values the deficiency. Say if the in place NOI was $75,000 then the value at a 10% cap rate would be $750,000. The seller would be taking a $100,000 haircut by doing an incorrect calculation. At lower cap rates this would be magnified even more.", "replies": [], "depth": 3}], "depth": 2}, {"id": "g4w4f7w", "text": "&gt;Well both change.\n\nThe value changes if NOI changes and cap rate stays the same.  The market decides if the cap rate changes so both don't change just because you were able to change NOI.", "replies": [{"id": "g4wfsgf", "text": "They are two seperate metrics, one is the operating cap rate. The other is the market cap rate.  You will hear both when in conversation.", "replies": [{"id": "g4wnqtz", "text": "Can you explain?  I have never heard of these separate metrics.", "replies": [{"id": "g4wrn0s", "text": "I'll let Wikipedia give you a much fuller explanation.\n\n[here](https://en.wikipedia.org/wiki/Capitalization_rate?wprov=sfla1)", "replies": [{"id": "g4wrv86", "text": "Yeah, I'm going to call that wikipedia  total BS,  If you can't explain what the separate metrics  are then maybe you don't know what you are saying.", "replies": [{"id": "g4ws5xr", "text": "Here I'll Tl;Dr it for you:\n\nWhen you purchase you pay based on current cap rates, and NOI or you generate your cap rate by determining what you agreed to pay vs the noi.\n\nWhen a year later you know what you paid for it, and you know what your noi is, so that tells you if you are doing better or worse. \n\nSorry my not spoon feeding it to you invalidated the fact that it's a thing, and operators use it quite consistently.", "replies": [{"id": "g4wshhh", "text": "No, what you are saying is not factual.  A cap rate does not tell you  if \"you are doing better or worse.\"  How could it?  A cap rate is merely a valuation metric.  I can spoon feed you this information.", "replies": [{"id": "g4wt7or", "text": "Dude, it's math. There are three variables. When you have two and you solve for the third, it gives you data.  Maybe in the niches, oms and investors you run with they don't use cap rate calculations for projections and planning, doesn't make it wrong.\n\nIf Im researching a new market I can call a broker up and say what's the prevailing cap rate of my assert class?  Great so if I'm going to deploy 5M I know what kind of cashflow I should expect from well operating properties.  That's an example of using cap rate for projection and planning.  I don't need to dig deep into a pro-forma to figure out if it's operating well.\n\nI tried to link you to more information, I've now tried to explain it to you three different ways, would it make you feel better if Brandon starts talking about on podcasts?", "replies": [{"id": "g4wtm9z", "text": "Brandon???  If \nBrandon wants to jump in I am more than happy to educate both of you.  It is the math. Please show what math you are talking about.  A caprate tells you what investors have paid for NOI, You are out in left field.", "replies": [{"id": "g4wu17o", "text": "See we agree. The cap rate tells me if I have an NOI of 150,000 and paid $1M 5 years ago that I have 15% Cap Rate.\n\nNow through the magic of rent increases, expense reductions my NOI when I bought was 50k, I bought at a 5 cap.\n\nSo again, to reiterate. I paid $20 per NOI dollars my first year. Now, 5 years later I paid 6.66 for each dollar of NOI. The 15% cap rate is my operating cap rate, or how well my initial purchase price is on giving me a return.", "replies": [{"id": "g4wucjx", "text": "NOT AT ALL!  I can educate you.  I am a commercial appraiser that has over 40 years of experience.  Who is Brandon?", "replies": [], "depth": 12}, {"id": "g4wuo84", "text": "A 15% cap rate means your dollar of NOI is worth $6.66  V=i/r Yuck  Brandon is leading you down the garden path!  LOL", "replies": [], "depth": 12}], "depth": 11}], "depth": 10}], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}, {"id": "g4z1jwb", "text": "Maybe you are confusing operating NOI with stabilized NOI.  There would be a difference in the value but the cap rate would be the same.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]