Pleasant Plains, Sangamon County, Illinois: Browse Thousands of Acres of Land for Sale in Pleasant Plains, Sangamon County, Illinois.
If a property was listed for R1,000,000 and generated a net operating income (NOI) of R100,000, then the cap rate would be R100,000/R1 million or 10%. Thus, cap rate = annual net operating income/cost and is expressed as a percentage. Here is how a cap rate is commonly used. Suppose you are researching the recent sale of a warehouse building with a stabilised Net Operating Income (NOI) of R1 million, and a sale price of R17 million, it is common to say that this property sold at a 5.8% cap rate.
What You Should Know About The Cap Rate. 1  Cap Rate Definition. 2  Cap Rate Example. 3  Intuition Behind the Cap Rate. 4  When, and When Not, to Use a Cap Rate. 5  Components of the Cap Rate. 6  Band of Investment Method. 7  The Gordon Model.