The fundamentals of multifamily real estate — NOI, cap rates, valuation, and the numbers that drive apartment building prices.
Apartment buildings are valued as businesses. Net operating income is what the property earns after operating expenses and before debt, and the cap rate is the yield buyers in that market expect on it. Divide one by the other and you have a value, which is why a small change in rents or expenses can move the price of a building by far more than it would a house.
Start here if you are new to multifamily or want a refresher: how to read a rent roll and a T-12, how lenders size loans with debt service coverage, what value-add really means, and how to run the numbers yourself with our free calculators.
Multifamily calculators · Glossary · Seller guides · Investor guides
