Cap Rate

NOI (Income before paying mortgage and income taxes)/Purchase Price

quote:

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Jumping off of this, what do you real estate investors consider an ideal cap rate? I personally won't touch anything unless its at least at 10%.

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Cap rates vary depending on risk. Saying something like "I personally won't touch anything unless its at least at 10%." is a little silly in my opinion. A sure thing 5% can be better than a risky 10%. Also can depend on how long the "cap rate" is going to last. You can buy leased properties at 10%+ cap rates all day long with short-term leases in-place but you might lose it all trying to re-lease the space after the lease expires. Likely to make more money on a 7.5% cap rate long-term lease property.