Real Estate AnalysisWhat Is Cap Rate and How to Calculate It? – Infographic by Daniela Andreevska July 1, 2019July 1, 2019 by Daniela Andreevska July 1, 2019July 1, 2019There are many ways to calculate return on investment in real estate, and one of the most popular ones is the capitalization rate, or cap rate for short. If you are a beginner real estate investor, you might be wondering “What is cap rate?” and “How do you calculate the cap rate of an investment property?” In brief, the cap rate measures the rate of return of a rental property regardless of the method of financing (cash or mortgage). This is what makes cap rate different from the cash on cash return which takes into consideration the financing method. In a way, the cap rate evaluates the level of risk associated with a particular real estate investment.If you are ready to learn all the basics of cap rate and calculating this metric of profitability in the real estate investing business, have a look at the infographic below. Our What Is Cap Rate and How to Calculate It? real estate infographic will show you:The cap rate definition in real estate investingThe cap rate formulaThe most important factors which affect the cap rate of an investment propertyA cap rate calculation exampleThe biggest advantage of using cap rateThe biggest disadvantage of using cap rateWhat is a good cap rate for rental propertiesThis infographic was created by Venngage Infographic and Real Estate Brochure Maker.In case you are just getting started in real estate and need some more help, you should check out our article The Beginner’s Guide to the Cap Rate Calculation in Real Estate. There you will find more details on each aspect of the cap rate highlighted in the real estate infographic above.If you are ready to move forward with buying an investment property and would like to know what cap rates by city real estate investors can expect in 2019, read this blog. In addition, here you can figure out the highest cap rate cities for traditional rentals and for Airbnb rental properties in 2019.To start looking for investment properties for sale with a high cap rate in any US housing market, sign up for Mashvisor. Within a matter of minutes, you will be able to find a profitable rental property which matches all your criteria in your location of choice. This will save you weeks and even months of work required to perform real estate market analysis and investment property analysis if you’re using spreadsheets only. Start Your Investment Property Search! START FREE TRIAL Cap RateInfographicsReturn on Investment 0FacebookTwitterGoogle +PinterestLinkedin Daniela AndreevskaDaniela is Marketing Director at Mashvisor. She has been writing about real estate investing for a number of years. Previously, she worked in economic policy research and fundraising. Daniela holds a Master degree in Middle East and Mediterranean Studies from King’s College London. Previous Post How Do Online Real Estate Auctions Work? Next Post 3 (Surprising) Best Airbnb Locations to Invest In Related Posts Rental Property Calculator: How to Make the Best Real Estate Investments in 2018 and Beyond How to Value an Investment Property Why Is Real Estate Market Analysis So Important? The 5 Most Profitable Airbnb Locations According to Mashvisor’s Investment Property Calculator What’s the Best Airbnb Analytics Platform for 2019? What Is a Good Cash on Cash Return? Real Estate Return on Investment: Which Metric Should I Use? Is Location the Main Determinant of Positive Cash Flow in Real Estate Investing? Real Estate Analytics Software: How to Use It to Make Money Here’s the Best Way to Do Comparative Market Analysis How Do You Calculate Rate of Return on Investment in Real Estate? What Can an Investment Property Calculator Do for You?