Real Estate Ratios

Question 1

What is a cap Rate

Answer 1

It’s a real state valuation measures, used to compare different real state investment. It is the ratio of net operating income to property asset value. For example if the property recently sold for 1 million and had NOI of hundred thousand then the Cap Rate would be 10%

Question 2

What does 7.5% cap rate mean?

Answer 2

A 7.5 caprate mean that you can expect is 7.5 annual gross income on the value of your property or investment. If your property’s value is 150,000, a 7.5 Rate wll mean yearly return of 11,250.

Question 3

What is an overhead cost?

Answer 3

What is an overhead cost?Overhead costs are not directly linked to profit generation then necessary as they provide critical support for the profit-making activities.Some organisations split up this costs into manufacturing overheads, selling overheads and administrative overhead costs.

Question 4

What is direct cost?

Answer 4

Direct costs required to create products and services such as direct labour and materials decide excluded from overhead costs.

Question 5

What role both overhead cost and direct cost play in the company?

Answer 5

Businesses have to take into both these costs to calculate the long-term product and service prices doing so allows the best kisses to and profits on a long-term basis.

Question 6

Some examples are overhead costs.?

Answer 6

Rent, utilities, insurers, office supplies, travel, advertising expenses, accounting and legal expenses, salaries and villages, appreciation, government fees and licenses, property and taxes.