Are you looking to buy an income producing property? Here's what you need to know:
When buying a property to rent out, like any investment, you're going to want to know your return. In real estate, the annual return as a percentage of your purchase price is called a Cap Rate. To make it easy, we've built a calculator for you to use, below.
Once you've calculated your Cap Rate, you can begin to compare properties to determine which is the better investment.
Cap Rate Calculator:
- Keep your monthly expenses down!
- Diversify your assets (3 family is better than 2 family)
- Find neighborhoods with low vacancy rates
- Identify value-add components
- Don't mistake a nice home with a good investment
Of course, if your strategy is to develop or improve, your Cap Rate is less important as other metrics. Contact us for help with any real estate investment related questions that you may have.