It’s used by taking the net operating income (NOI) of the rent collected and dividing it by the capitalization rate. The income approach is a real estate valuation method that uses the income ...

Operating income measures a company’s efficiency and performance and is the profit after operating expenses have been subtracted from gross profit. Before delving further into operating income ...

The cap rate formula involves dividing a property's net operating income (NOI) by its purchase or appraised value. Higher cap rates suggest higher return potential but also greater investment risks.