You lease a flat and the lessee pays you 10.000 CZK a month. What is the price of this flat under this circumstance? Every year you obtain 120,000 CZK. Property Valuation Act states the rate of capitalization for the valuation of an asset. For residential houses, apartments it is on average 5%. into the formula that shall be known for perpetuity calculation. However, instead of a bond, security yield (V) we use annual rent, and instead of bank interest rate (i) we use capitalization rate.