Cap Rates and Income Yields

Cap Rates and Income Yields covers NOI, cap rates, income yields, cash-on-cash return, resale proceeds, reversion, feasibility, appraisal approaches, rent ratios, and real-estate valuation metrics.

Use these pages when property income, expenses, valuation method, exit assumptions, or investment yield changes collateral value or investor return. It sits inside Property Income and Valuation Metrics, so readers can move up when the broader property-finance context matters.

Use the table below to choose the narrower mortgage or real-estate finance branch before applying a term to a loan file, closing record, servicing review, investor report, appraisal, or valuation model. Move into the term page when the document, calculation, party role, lien position, or property cash flow matters.

What This Branch Covers

What to Check

• NOI, effective gross income, operating expenses, reserves, cap rate, discount rate, and rent assumptions.
• Appraisal, valuation model, rent roll, lease terms, market comparables, sale data, and expense records.
• Income approach, cost approach, repeat-sales data, cash-on-cash return, reversion, and resale proceeds.
• Property type, location, occupancy, lease rollover, capex, tax, and financing assumptions.
• Effect on loan sizing, LTV, debt service, equity return, collateral value, and exit risk.

Common Mistakes

• Using gross rent as if it were NOI.
• Ignoring capex, vacancy, reserves, taxes, and lease rollover.
• Comparing cap rates without property type, lease quality, and market context.
• Treating appraisal value, transaction price, and model value as identical.

Property-income and valuation content is educational and does not provide appraisal, investment, tax, accounting, legal, or lending advice.

In this section

Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.