Agricultural Economics Department
Date of this Version
9-2011
Citation
Cornhusker Economics (September 2011)
Abstract
Recent price increases for many of the crops grown in Nebraska have been followed directly by higher input costs. Land cost is one of these escalating factors. Typically, those that invest in real estate or land use a ratio of income relative to opportunity cost to evaluate the value of that purchase. This ratio involves factors related to the lands use and productive capacity, and is known as the “Capitalization rate” or “Cap Rate.”
Comments
Published by University of Nebraska–Lincoln Extension, Institute of Agriculture & Natural Resources, Department of Agricultural Economics. Copyright © [2011] Board of Regents, University of Nebraska. http://agecon.unl.edu/cornhuskereconomics