Simply put, the rate of return for real estate investment property is what cap rate means. It is the percentage of your initial investment that you will receive each year. Imagine that $100,000 is the price you paid for an apartment. The cap rate is 10%. This means that 10% of your initial investment will be returned each year. You can see that your net cash flow after ten years will equal zero. This means that you will start making money from the eleventh year.