Updated about 10 years ago on . Most recent reply
Figuring Cap Rate
I looking at a property and the owner lists it at a 12% cap rate. I did my math and the real number is closer to 8%. The property is class B or C. I am new to this, but it isn't prime and isn't terrible either.
When calculating cap rate do you include cap ex., property management, vacancy rate, maintenance and repairs and all other operating expenses? Just want to make sure I am understanding the numbers right.