Cap Rate (Capitalization Rate)
How much the property earns per year for every dollar it costs you in total - ignoring the loan, so any two properties can be compared fairly.
Cap rate measures a property’s unleveraged return: the net operating income it produces per dollar it costs you in total (price + rehab + closing costs). Because financing is ignored, cap rate lets you compare any two properties on equal footing.
Example: NOI $18,000/yr on a $200,000 all-in cost = 9% cap rate. Typical US residential deals run 4–6%; strong cash-flow markets reach 8%+.
OnOffDeals computes cap rate on the ALL-IN cost — not just the purchase price — so a heavy-rehab deal cannot hide its true basis.