Cap rate /COC Determination

[Mark Hong]

Hi All,

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.