When arriving at the “Net Income” portion (top number of fraction) of the cap rate, is the cost of the monthly loan payment figured in to this number?
Yearly Income = $100,000
- Cost to operate = $40,000 (summarized for utilities, upkeep, salary, taxes, etc)
- $30,000 Loan Repayment at $2500 / Month
= $30,000 NET
So, for CAP Rate top number, do I use $60K or $30K?