I have a simple/stupid question. Do you factor in property management fee as part of your formula to calculate Cap rate?
When I was searching for properties, the listing agent's calculated Cap rate almost never factor in property management fee and I have always include it in my calculation. My agent would send me the properties that "may fit" my criteria; however, it actually does not. My offer price often is significantly lower than they have anticipated.
@Mark Hong A banker would consider the management fee so you should too, especially since there is no chance you will manage the property.
@Tim Swierczek Thx for the answer, I will just have to make sure my agent is on the same page.
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