Cap Rate Comparison Calculator
Cap Rate Comparison
Compare the capitalization rates of two investment properties to evaluate relative value
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Formula
Cap Rate = (Net Operating Income / Property Price) x 100
Frequently Asked Questions
What is a good cap rate?
Cap rates vary by market and property type. Generally, 4 to 6 percent is typical for low-risk properties in strong markets, while 8 to 12 percent indicates higher risk or secondary markets.
Is a higher cap rate better?
A higher cap rate means a higher return on investment but often indicates higher risk. Lower cap rates suggest safer, more stable investments but with lower returns.
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