How do you determine the Net Operating Income of a commercial property?
You can multiply the Cap Rate by the sales price of the property.
Capitalization Rate (Cap Rate) is widely used to determine a commercial property's profitability, risk, and rate of return.
Cap Rate is used to calculate
1) Estimated property value,
2) Property cap rate, and
3) Net operating income.
The last way we can use Cap Rate is to estimate the Net Operating Income (NOI).
In this video, we learn how to calculate the estimated NOI of a commercial property.
