What is a good Cap rate for a SFR in lower CT?

5 Replies

What would you consider a good cap rate and a minimum cap rate you would accept for a property in lower Connecticut? I'm looking at a property in Milford, in particular. 

Have you looked over similar recently sold properties?

@Tom Mendez I have, they come in around $200k. He has the properties rented for $1350/month. 

I could look at comps and local rental rates and estimate expenses, but I'm also curious what investors themselves would expect for a cap rate in this area. 

Originally posted by @Chris L. :

What would you consider a good cap rate and a minimum cap rate you would accept for a property in lower Connecticut? I'm looking at a property in Milford, in particular. 

Where would you find a reliable source for cap rate comps for SFR?

@Chris L.

Depending where in Milford it is, I would buy 5.5/6-caps all day. However, I'm not sure that's helpful because the problem with cap rates is that investors might underwrite assumptions differently. Our underwriting might come in higher because we tend to underwrite with slightly higher vacancies, cap-ex, repairs and we'll always include a PM fee.

Also, I'm not sure where in Milford it is, but just make sure that you find it if you'll need flood insurance (which can be a rental killer). Many homes in Milford - even if they're already raised - are not raised enough according to new FEMA standards.

Medium 19013 george logoJonathan Makovsky, Jon George Home Buyers | http://jongeorgehomebuyers.com/ | Podcast Guest on Show #107

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you