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What is a Good Cap Rate for an Investment Property?

  • Capitalization rate, or cap rate, is a metric used to determine the rate of return on real estate. It's most often used for commercial property investments, such as office buildings, hotels, or warehouses. However, it can be used with properties that are residential in nature, as well. This video includes a rundown of how to calculate a property’s cap rate, why understanding this concept could be useful for real estate investors, and another return metric that could be more useful when determining your investment returns. Read more here.