Are all cap rates the same?

[Logan Reinard]

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[Andrew Syrios]

Cap rates are used to boil different apartments or commercial properties to a comparable number; namely how much net income do they bring in versus the cost of the property.

But they don't account for risk, hassle or potential upside. Would you rather have a 10% return on your money in a dilapidated war zone or in a trendy area that continues to improve? The worse the area, the higher cap rate I would demand. So no, cap rates are not all the same.