The Law Dictionary

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CAPITALIZATION RATE Definition & Legal Meaning

Definition & Citations:

For example, if a building is purchased for $1,000,000 sale price and it produces $100,000 in positive net operating income (the amount left over after fixed costs and variable costs are subtracted from gross lease income) during one year, then: *$100,000 / $1,000,000 = 0.10 = 10%

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