Why is Cap rate important?

2 Replies

Is it because they dont trust that the Cap rate is accurate?

For example : if someones trying to sell their property and they only calculated for 30% expenses but its raelly 50% expenses, that would throw the whole numbers off. Is that the only reason?

Cap rates are useful to compare against the cap rate of the area or nighborhood. Learn how to calculate cap rate and check or re-do it yourself. Don’t go by other people’s calculations (of anything).