The capitalization Rate for property C is calculated using the below formulaĬapitalization Rate for property C = Net Operating Income / Current Market Value of property
Capitalization Rate for property B = 4%.Capitalization Rate for property B = $30000 / $750000.The capitalization Rate for property B is calculated using the below formulaĬapitalization Rate for property B = Net Operating Income / Current Market Value of property Capitalization Rate for property A = 3.33%.Capitalization Rate for property A = $50000 / $1500000.The capitalization Rate for property A is calculated using the below formula.Ĭapitalization Rate for property A = Net Operating Income / Current Market Value of property Let us take an example where an investor has to decide in which property out of 3 properties he has to invest. Capitalization Rate = Rs 50 lakhs / Rs 10 Crore.
