Question(s) regarding Cap rate
I'm still new to the real estate investing game and in my studies I have recently come across cap rates. While I understand the basic idea of a cap rate and how it is calculated, I'm a little confused on how to read them. For example:
1) Are cap rates utilized to analyze SFR, or just for multifamily/commercial?
2) Do you always look for a higher cap rate in a deal, or is it sometimes advantageous to seek out properties with lower cap rates?
I've been doing some digging, but can't seem to find a consensus. Any clarification would be greatly appreciated.