- Cap Rate Is How Investors Price Commercial Real Estate. Here’s What You Need to Know About Cap Rates For Your Real Estate Investments...
Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I’ve got quick video on capitalization (cap) rates.
Cap rate is a good starting point when you want to quickly compare investment opportunities, but it should not be the sole factor in any real estate investment decision. And always make sure you are doing your calculations based on actual numbers, not “what if” pro-forma numbers provided by a broker.
You still have to consider the many factors that affect the potential growth and decline of the investment, such as the increase in value of the property and any alternative investments available.
I cannot stress enough the importance of performing thorough due diligence in commercial income properties. That alone is what determines the difference between being a true "investor," and the next "don't-wanter" seller.
Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you’ll be automatically notified when we upload more quick video tips for you. Take care and good investing.