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How To Compute Cap Rate | Add Comment

    • Cap Rate and Value Addq 2/19/2009
    Even more importantly, you can use Cap Rate to calculate the value added to a property by an increase in NOI. Example: Cap Rate = 7.0 Increase your NOI by $100/month Yearly increase of $1200 at a Cap Rate of 7.0 Means your increase in value is $1200/0.07 = $17K As you can see, every little bit of added NOI helps and this additional $17 should be obtainable at the sale assuming the market Cap is Stable. Dike Drummond http://www.investortours.com

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