Cap Rate

[Zack Presnell]

What is the least cap rate acceptable for rental property from seasoned investors?

[Ned Carey]

Many investors prefer low cap rates as it is a sign of a high quality property.  The cap rate an investor chooses is in part determined by their goals and the risk they are willing to accept. 

Just as important are factors like what is the quality of investment, what is the investor's analysis of future prospects for the property, and what kind of financing can the investor can obtain.

You will find there is quite range of what is acceptable for seasoned investors.

Many investors are willing to accept low cap rates today because financing rates are low. I believe this is a risk many do not understand.