Can’t compete with Home owners

[Wade Pilling]

Cap rates are low in my area. Too many people moving here needing homes.  I can’t compete with people wanting to live here.  They are willing to pay more. Would you look into building rentals instead or try a different area ?

[Jason Hendrickson]

I would change my perspective. If CAP rates are low that likely means appreciation is going to be higher (since demand is what's driving up prices and thus lowering CAP rates). Sure a low CAP isn't appealing RIGHT NOW, but if demand is increasing then prices will continue to rise and the ROI on your once low CAP rate investment might start to seem pretty nice after a few years.