All Forum Posts by: Andrew Carlson

Thanks for the response. I know that was really a newbie question. But I figure I have to start somewhere. 

I'm reading a lot and learning about Cap Rate and other stuff this morning.  Maybe I should have waited and put the question in those terms.  

I've heard of the "10% rule" for evaluating commercial property, where the value of the property is 10 times the annual operating income (if I am understanding it correctly).

Obviously this is just a rule of thumb and there could be a lot of other factors.   

But with that said, on Long Island, NY, where there is endless suburban sprawl and almost no vacant land left, how does this rule hold up?  Is 10% still an appropriate number? Or is this local market a lot different?