Cap Rate Formula
The capitalization (cap) rate for a property is a ratio that measures the annual rate of return for an investment property. It is commonly used as a measurement to compare like properties for appraisal valuations or other comparative analysis.
Return On Investment
The ROI metric is used to evaluate the forecasted profitability on real estate investments. Any serious investment opportunities should have its ROI calculated.
What is a REIT?
A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. Modeled after mutual funds, REITs pool the capital of numerous investors. This makes it possible for individual investors to earn dividends from real estate investments—without having to buy, manage, or finance any properties themselves.