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LSDefine

Simple English definitions for legal terms

cap rate

Read a random definition: European Court of Human Rights

A quick definition of cap rate:

Cap Rate: Cap rate is short for capitalization rate. It is a way to measure the value of a property by comparing the net operating income (NOI) to the property's market value. In simpler terms, it is a percentage that tells you how much money you can expect to make from a property based on its current value. For example, if a property has a cap rate of 5%, that means you can expect to earn 5% of the property's value in income each year. Cap rate is an important tool for real estate investors to determine the potential profitability of a property.

A more thorough explanation:

Definition: Cap rate, short for capitalization rate, is a financial metric used to evaluate the profitability of a real estate investment. It is the ratio of the property's net operating income (NOI) to its current market value or purchase price.

Example: Let's say you are considering purchasing a rental property for $500,000. The property generates an annual net operating income of $50,000. To calculate the cap rate, you would divide the NOI by the purchase price: $50,000 ÷ $500,000 = 0.10 or 10%. This means that the property has a cap rate of 10%, indicating that it is a profitable investment.

Another example would be if you were comparing two different properties. Property A has a purchase price of $1,000,000 and generates an annual NOI of $100,000, resulting in a cap rate of 10%. Property B has a purchase price of $2,000,000 and generates an annual NOI of $150,000, resulting in a cap rate of 7.5%. Even though Property B generates more income, Property A has a higher cap rate and may be a more profitable investment.

The examples illustrate how cap rate is used to determine the profitability of a real estate investment. A higher cap rate indicates a higher return on investment, while a lower cap rate indicates a lower return on investment. It is important to consider the cap rate when evaluating potential real estate investments.

capper | caprice

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Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
WorthlessAttractiveZombie
7:44
My berkeley paragraph finally disappeared. I definitely think it is just an indicator that they are actively reviewing files, and does not mean anything about A, WL, or Rs
WorthlessAttractiveZombie
7:46
Also has anyone's date disappeared for W&L? Mine did last night
7:55
@WorthlessAttractiveZombie: mine did yesterday morning
7:56
Oops sorry I meant Vilanova. Mine disappeared last week
soapy
8:48
UMN under review! As predicted, decisions are gonna come out early December
Minus those random R decisions from UMN yesterday though right? I wonder what happened there. I don’t think I’ve seen a school start the season out with anything but As on here
almost all of my apps have been UR for 6 weeks at this point I feel exhausted waiting for them to finish
Irvine is being snobby and wont start any review until end of Nov.
Yeah, it’s tough. I’m distracting myself by playing good video games after work :)
im distracting myself by schizo-scrolling r/lawschoolamissions and every conceivable data point on this godforsaken website
it is not working
Haaa I naturally want to do that too. I’m trying to stop. They need a surgeon general’s warning on this site for perspective law students
i spend more time on here then anything else trying to rationalize that the waves from last year will match waves for this year (they won't) and that the stats of people with the same stats are indicative of my own (they aren't)
There aren't many people in my stat range so I pretty much know every result in my range after being on here for a few years
9:28
congrats on the 172 bruce
go dawgs fr
9:29
roll tide
do we foresee a fordham election day wave today (i'm delusional)
WorthlessAttractiveZombie
9:31
I think so, Jack
9:31
some people hate him. some people love him, but he a real one: https://youtu.be/w5oEqiVQcF4?t=173
9:32
[kevin oleary]
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
worthless i trust you implicitly you know what it will happen now.
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