Cap Rate for Real Estate Investors in Charleston, SC
It doesn't take long for a real estate agent to realize that there is much
more involved in purchasing investment or commercial real estate than just
showing the property and writing an offer to purchase.
Most real estate investors are seeking income producing properties. Residential real estate investors usually purchase rental properties, such as multi-family complexes: duplexes, tri-plex, quad-plex or trailer parks. Commercial real estate investors usually seek office space, retail space, restaurant space, or warehouse space.
Commercial and residential real estate investors usually base their decisions on a CAP RATE, or (capitalization rate). A cap rate is used to determine if a property has an adequate rate of return. A cap rate is a formula that reflects the rate of return on the investment dollar.
Cap rate is calculated by using three numbers: income, expenses, and purchase price. Each market is different, but generally speaking, an acceptable cap rate would be 8 or 9, with 10 or over, being a really good cap rate.
To protect your net profit on your real estate investment, be sure your agent is knowledgeable and experienced in calculating CAP RATES. It affects your bottom line.
Cap Rate for Real Estate Investors in Charleston, SC
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