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Cap Rate

Capitalization rate, a property's net operating income divided by its price or value, written as a percentage. A quick yardstick for comparing the return on different rental investments.

At a patio table, a property owner works out numbers in a notebook with a calculator as a co-owner watches, house keys beside them
  1. Divide yearly net income by price
  2. Leave out the mortgage
  3. Compare similar rentals

Where it matters

Look up the term in your agreement, report or local rule. Save the source and date so you can check the wording later.

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This page is general education. The current law, program rules, and specific housing records determine how a rental home is treated. Rentari provides software and written guides, not legal advice or licensed property management.

Put this into practice with Rentari's landlord software, tenant management software and rental property management software.

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