Real Estate Investment Analysis - Capitalization Rate (Cap Rate)

 

Notes:

• What problem does it solve?
  This code calculates the capitalization rate for a real estate investment to help evaluate the property’s return relative to its price.

• How can businesses or users benefit from customizing the code?
  Investors can use this tool to quickly compare the profitability of multiple properties.

• How can businesses or users adopt the solution further, if needed?
  The tool can be extended to include various property types and include more complex revenue streams.

Actual Python Code:

class CapRateCalculator:

    def __init__(self, annual_net_income, property_value):

        self.annual_net_income = annual_net_income

        self.property_value = property_value

    

    def cap_rate(self):

        return (self.annual_net_income / self.property_value) * 100

# Example usage

cap_rate = CapRateCalculator(annual_net_income=24000, property_value=300000)

print(f"Cap Rate: {cap_rate.cap_rate():.2f}%")