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Balbhandari, Home Buyer in Ferrysburg, MI

what is cap rate.?

Asked by Balbhandari, Ferrysburg, MI Tue Mar 6, 2012

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This is a way to compare returns on investments with different prices, rents, taxes, expenses.
It's not an end all be all of comparisons as there are many things it does not evaluate, but a tool in the decision making process.

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Bruce Lynn, Real Estate Pro in Coppell, TX
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Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
0 votes Thank Flag Link Tue Mar 6, 2012
A cap rate is simply what kind of return the investment has at the moment. It's derived by dividing the current net operating income, before debt payments, by the sales price. If you're looking into investing in real estate, I would suggest that you consult your local chapter of CCIM to find a competent commercial real estate investment specialist. CCIM designees are the most competent in advising investors. Many residential real estate agents are not well versed in investment real estate and you don't want to make a mistake by investing poorly. Google CCIM and then go to the location nearest you to find the local chapter web site.
0 votes Thank Flag Link Tue Mar 6, 2012
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