The cash on cash yield is a return measure that expresses the cash flows paid to the investor of an income-producing property as a percentage of the asset’s value at the beginning of a certain period. This performance metric is used to measure periodic returns because it involves the cash flows paid back within a certain period of time. For example, the distributions of a real estate asset mi ...

The capitalization rate or overall rate (OAR) is a fundamental metric used by investors, brokers, and lenders to determine transaction pricing (the price at which the deal gets done).  The cap rate is determined by dividing the NOI by the transaction price or projected value (cap rate =NOI/value).  Moreover, a property value can be determined by dividing the NOI by the cap rate (val ...