what is considered a good cap rate for rental property
There are many factors that can affect the cap rate of an asset's at any time, as illustrated in the above illustration. To determine whether a caprate is "good", it requires a comparison of the asset to other assets in the same market at the time, an assessment of the capital cost and alternative investments, as well as an honest assessment of the investor’s tolerance and risk profile. There is a lot of data available that can be used to assess whether the cap rate of an asset matches the risk-return ratio of similar assets. After performing the necessary diligence and accounting for any variations in the property relative the comp set, it is up to each individual's personal goals and risk tolerance to determine what a "good cap rate" means.
