Management Fees and Cap Rates
I have been listening to the bigger pockets podcast for a couple of months now and have heard more than one investor say they look for a 15% return on investment. I know the cap rate is the annual return on investment and ideally who would not want a 15% cap rate, however I am curious on how investors are computing this cap rate. For example are management fees paid to a management company included? Lets say I am looking at properties and I want to include that cost in my cap rate calculation what would be a good percentage to include to represent management fees per month? 6%? What is the most common? Should I even consider it? I know there are calculators, however management fees is something I would like to include and I just want an idea of what rate is the most common.