What is “N-CAP’R”Income Capitalization generally refers to the process of converting anticipated future income into present value. The Income Capitalization Approach is the procedure used to accomplish this conversion. It often involves calculation and application of many different rates and/or factors that identify the quantifiable relationships between a property’s income and its value. One of the most widely recognized measures used in the income capitalization approach is the Overall Capitalization Rate. In simplest terms, an overall capitalization rate is the ratio of one year’s net operating income to value. Since an investment property can (and often does) have more than one year’s net operating income, it can have more than just one overall capitalization rate. Likewise, there are many other quantifiable measures of relationships between a property’s income (or a part of its income) and its value (or corresponding part of its value). What do we call all these measures? The term “Income Capitalizer” was devised for the purpose of describing any measure (capitalization rate, or factor) that may be applied to property income (either directly or indirectly) in order to obtain an indication of the property’s defined value. N-CAP’R is an acronym for the term “Income Capitalizer” and is the name given to this computer program which was specifically designed to assist Real Estate Appraisers, Review Appraisers, Mortgage Underwriters, Lenders, Investors, Assessors and others, in obtaining reliable conclusions of various income capitalization rates, yield rates, and income based values of real estate. N-CAP’R is currently divided into two applications.
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