What is considered good cap rate when investing domestically?

5 Replies

I live in Ohio and so I'm used to a certain rate of return. I've never invested outside of Ohio so I'd like to know what is considered good cap rate when investing in other cities such as Las Vegas, Los Angeles, Atlanta, etc?

"Good" Cap-Rate will vary from each investors perspective. In the city of LA you aren't getting a good cap rate generally unless if you are buying significantly below market value. At that point you either can get a decent cap rate or you likely could flip the property for massive profits. Anything above 10% IMO in LA is pretty good. Many investors will take 6-8% for sure.

Interesting @Brett Goldsmith I would’ve thought 6-8% for California is like a gold mine. I’m seeing cap rates as low as 3-4% being advertised. Where I’m from depending on if you’re buying turnkey or fixer upper you can average between 12-20%

@Alex Price If there was a bunch of 10 CAP stuff out in LA I wouldn't be in business lol.

In NYC, cap rates are hyper local and vary from under 2% in high end Manhattan neighborhoods, to about 5.5% in parts of the boroughs. They can get a bit higher but that would the exception.

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