How the exam uses capitalisation rate
Using gross rent instead of net operating income. The word net is doing all the work in the definition.
What a question on this looks like
A property generates $48,000 net operating income and sells for $600,000. What is the capitalisation rate?
Answer: 8% Cap rate is net operating income divided by value. Use NOI, never gross rent.
Drill this in context at practice by topic, or browse the full glossary.