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Cap Rate Calculator

Cap rate is a very useful ratio in the real estate industry that can be helpful in several scenarios

Cap rate is a very useful ratio in the real estate industry that can be helpful in several scenarios

Cap Rate Calculator

by Daniel Simons
Cap Rate Calculator
Cap Rate Calculator

What is it about?

Cap rate is a very useful ratio in the real estate industry that can be helpful in several scenarios. It often is used to size up an acquisition relative to other potential investment properties. A 4% cap rate acquisition versus a 10% cap rate acquisition for a similar property in a similar location should immediately tell you that one property has a higher risk premium than the other.

Cap Rate Calculator

App Details

Version
1.0.1
Rating
NA
Size
13Mb
Genre
Finance Education
Last updated
September 11, 2015
Release date
July 7, 2015
More info

App Store Description

Cap rate is a very useful ratio in the real estate industry that can be helpful in several scenarios. It often is used to size up an acquisition relative to other potential investment properties. A 4% cap rate acquisition versus a 10% cap rate acquisition for a similar property in a similar location should immediately tell you that one property has a higher risk premium than the other.

Another way cap rates can be helpful is when they form a trend. If you look at cap rate trends over the past few years in a particular sub market you can get an indication of where the market is headed. For instance, if cap rates are compressing that means values are being bid up and a market is heating up. Where are values likely to go next year? Looking at historical cap rate data can quickly give you insight into the direction of valuations.