A cap rate is not a return metric. Cap rates are a valuation metric. The formula is V=i/r $20=$1/5% Now increase the NOI to $2 $40=$2/5% If the cap rate was a "return" then you would expect doubling NOI would increase your "return" but it just doubles your value.
@jordanv312227 күн бұрын
Doubling your net operating income does increase your return. Either the return has to increase or the expenses have to decrease to increase the NOI, both of which increase your return, right?
@Walina-gv9ph7 күн бұрын
@@jordanv31222 What return metric are you referring to? NOI changes with income and expense changes. There is no return there.
@Walina-gv9ph6 күн бұрын
@@jordanv31222 NOI changes with income and operating expenses. NOI is not a return so what return are you referring to?
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