In self storage, a cap rate is any rate used to convert income into value, commonly calculated by dividing net operating income (NOI) by the sale price. Short for capitalization rate, this tool is used in valuations of real estate to compare the ROI (return on investment) that may vary with rent rates, construction, location and a myriad of differences that can occur between two properties. Cap rates are also an indication for an investor to know what return he or she is looking for and what he or she is willing to pay when purchasing a self storage property.