Overall Rate of Return (OAR)

Percentage relationship of net operating income divided by the purchase price of property. See also Capitalization Rate.

The percentage relationship of Net Operating Income divided by the purchase price of property. See Capitalization Rate.
Example: Property that sells for $1,000,000 is anticipated to produce a net operating income of $100,000 per year. The indicated over-

all rate of return is 0.10 or 10% ($100,000 ˜ $1,000,000).