Cap Rates Explained: How Important Are They?

Cap Rates Explained: How Important Are They?

A capitalization rate, more commonly referred to as a cap rate, is a metric commercial real estate  investors use to analyze properties and calculate the rate of return. The cap rate is calculated by dividing the net operating income of the property by the...
Cap Rates: A Highly Misunderstood and Imperfect Metric

Cap Rates: A Highly Misunderstood and Imperfect Metric

By Andy Friedman   If I had a nickel for every time I’ve been told by a real estate investor that they will only consider a property with X cap rate or above, well, I’d have a boatload of nickels.  There are several problems with using cap rates as your main...
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