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LSDefine

Simple English definitions for legal terms

cap rate

Read a random definition: constitutional majority

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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HopefullyInLawSchool
15:50
Bro is studying to beat the charges
shaquilleoatmeal
15:52
While representing himself in court, McKinley's sentence was reduced from 100 years to 25, a sentence he served in full. While still incarcerated, he took the LSAT, or Law School Admission Test, and applied to law school - no shit, thats impressive how much he lowered his sentence being pro say
JumpySubsequentDolphin
15:52
@HopefullyInLawSchool: that made me lol
babycat
15:52
there was a convicted rapist admitted to some southern law school not too long ago
shaquilleoatmeal
15:53
smh
glovediedthisishismom
15:53
fun fact gangs specifically have all their shooters be 12-16 year olds so they can go to juvee and get their charges sealed like nothing happened
shaquilleoatmeal
15:56
yo, what should i pick up for dinner?? Cava or Sweetgreen
glovediedthisishismom
15:56
sweetgreen
glovediedthisishismom
15:56
i wish i had one close to me
babycat
15:56
shaq how did your date with Uber girl go?
soyalmondoatmilk
15:57
OMG I LOVE SWEETGREEN
shaquilleoatmeal
15:57
lmaooo oh man i gotta find a way to make a long story short - sg it is ! What do you guys usually get? I'm tired of my same old same old
soyalmondoatmilk
15:57
i love the harvest bowl
soyalmondoatmilk
15:57
their salmon is good too
shaquilleoatmeal
15:58
@babycat: you gonna be on later tonight? i gotta get home, shower, and then I can hop back on and give you the break down lmao
shaquilleoatmeal
15:58
i dont know how much i trust salmon from quick take out spots so i've never tried it there. Harvest bowl is OG and always good for when you need a quick decision
soyalmondoatmilk
15:59
that's so fair. i love their roasted sweet potatoes and spicy cashew dressing--highly recommend
babycat
16:00
@shaquilleoatmeal: I’ll stop by just for you. I gotta grind out some of my last essays tn.
shaquilleoatmeal
16:02
@soyalmondoatmilk: im weak af, can't handle that spicy cashew lmao
shaquilleoatmeal
16:03
@babycat: 😘 see you in a bit, grind out those essays before you hop back on
shaquilleoatmeal
16:04
appreciate the non wink since you didn't appreciate it them then lol
babycat
16:06
I'll do it for you ;)
16:06
Tough to justify attending a law school where the admissions office does epic resistance political commentary at the info session
BulbasaurNoLikeCardio
16:07
making me feel jealous here wow, I am about to go taste test a bunch of deserts for our baby shower this weekend.
BulbasaurNoLikeCardio
16:07
@milktoast: what school got political at an info session?
shaquilleoatmeal
16:11
nothin to be jealous about, i've been trying to slide into babycats dms but shes got a long line I guess I gotta wait in to see if I can get in lmao
babycat
16:11
omg if you get into ASU they give you travel expense reimbursement to go there for a visit. does anyone know which other schools do this? I'd love to get a comped vacation
shaquilleoatmeal
16:12
think BU gives you $300 or somethin
ClassyPleasantHeron
16:12
Where is ASU getting this kind of $$$ from? They waive CAS fees too.
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