How can I find the cap rate for an area?

Question

I'm thinking about selling one of my properties on my own and I'm not a real estate agent. How can I find the cap rate for my area? Is there a way for me to get comps and figure it out for myself? I'm finding it impossible to find the area cap rate without being a real estate agent. I know my NOI and have set a price with a cap rate, but I'd really like to know what the cap rate for my zip code/area is on this rental. Thanks in advance for any help.

Lori

Bill Gulley · Answer

Lori, really not possible, a market cap rate is only used by an appraiser as a rate generally accepted by other investors, which is nothing more than an educated guess of an opinion as actual cap rates are historic and only applicable to each unique investor. The only reason appraisers must go there isv to estimate the income approach used with the market and cost approach to value.

You cap rate will never be the same as a new buyer's cap rate.

Your actual cap rate is an indication of what others may accept, how happy were you with your earnings? If you weren't happy, might consider a lower price.

Generally, look to the market of other sales, in some areas these are reported for tax purposes. It shouldn't be hard to find a Realtor to provide certain services for a small fee.

Don't price your property to any cap rate alone. Good luck :)

Kevin Zimmer · Answer

Why wouldn’t you want to use an agent? Forget about what it will cost you, focus on what you will net. IMO, the best use of your time is to research and interview agents that can provide the services you need at a cost that provides value, especially with commercial property.Your buyers (investors) typically do this for a living, so they are knowledgeable and savvy.You don’t need to know everything about selling as long as you hire someone who does. The broker is the middle man between your negotiations. The buyer will most likely have one.Shouldn’t you be as well prepared?The broker also knows prices, neighborhood trends (business), and they have a network of buyers and sellers,

To find brokers to interview, go to loopnet.com and see what agents are listing and selling properties similar to yours in your area..

Unless, of course, you have a lot of time on your hands and are thinking of transitioning into the real estate business.But then I would still recommend using a broker for YOUR property.Remember that saying about the attorney that is representing himself…he has a fool for a client?

Good luck

Account Closed · Answer

You would need some very specific information to the area in question but it would only be accurate if the assumptions are.

Corey Melkonian · Answer

I agree with Kevin, I'm a Realtor with Century 21 and I didn't sell my  personal residence. No matter how good of a negotiator you are, there's someone out there a little better that you and it's always good to have an arms length transaction. I find that it's hard to think clearly if you're in it. A good agent gets you more that what you pay them for.

How can I find the cap rate for an area?

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