Talk:Capitalization rate

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Cap rate example[edit]

"If the owner bought the building twenty years ago for $200,000 that is now worth $400,000, his cap rate is

$100,000 / $400,000 = 0.25 = 25%."

Where did $100k come from? Previous paragraph? 1st yr CapRate would be 50%(100k/200k) !? NOI ∆s annually. Impossible to remain the same for 20 years. CR is based on current NOI for valuation when selling or exchanging RE. XC doesn't even have to be RE - RE, just "like kind". (Yes I know about balancing equities in RE XCs.) 2603:6000:D70A:BC00:49A4:ACFA:5D67:386E (talk) 18:49, 1 April 2022 (UTC)[reply]