Cap Rate - Remember IRV How Do I Calculate CAP Rate And What Is A CAP Rate? Every beginner real estate investor is bound to ask questions like “ What is a cap rate ?” and “How do you calculate cap rate?”. This is because the capitalization rate (or cap rate, for short) is one of the most commonly used real estate metrics in the industry. It’s one of the first numbers you’ll see when you begin to look at listings of investment properties . As you start to network, you’ll even find real estate investors discussing “What is a good cap rate?” and “What real estate markets give the best cap rates?” It seems, then, that you can’t escape cap rates when you invest in real estate. The sooner you get the answer to “What is a cap rate?”, the sooner you can start your journey of investing in real estate and finding the best real estate investments . What Is a Cap Rate? When we talk about what is a cap rate, we are essentially talking about the return on investment o...
Steve Freeman, CIPS, Coldwell Banker Commercial Alfonso Realty, Ocean Springs, MS