Why are Cap Rate explanations so complicated?
May 19, 2011 by admin · 1 Comment
Filed under: Multifamily Investments, Value Investor's Guide to Apartment Buildings
Filed under: Multifamily Investments, Value Investor's Guide to Apartment Buildings
If you listen to any conversation about commercial real estate (CRE) within a minute the subject of cap rates will come up. Those who are just beginning to explore CRE are often thrown off by what one is and how it is calculated. A cap rate is really a simple thing that is often made overly complicated by the way it is explained. Let’s walk through what a cap rate is and then we’ll look at how they are used so that the next time the conversation turns to CRE you’ll be right there in sixty seconds when they get to cap rates.
A Capitalization Rate or Cap Rate for short is simply what you would earn on a property if you Read more
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