High Cap Rates , Low Cap Rates , and Successful Real Estate Investing
By Rusty Tweed
Using Cap Rates to Make Informed Real Estate Investing Decisions
Don ’ t be fooled by the simplicity of the cap rate , or capitalization rate — this simple calculation can reveal a trove of insight on potential real estate acquisitions . Some have even argued that this number is the single most important metric for any budding real estate investor to understand .
Our guide makes it easy to wrap your head around cap rates and use them to your advantage . So , without further ado , let ’ s jump in and learn .
What Can a Cap Rate Tell Me ?
Image by StockSnap from Pixabay
In a nutshell cap rates provide a quick and simple way to help get a feel for a property ’ s overall investment potential and a balance with the property ’ s levels of risk and return on investment . To better understand how to achieve this , we ’ ll look at a few examples .
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