The Real Estate Investor’s Friend: the Cap Rate Calculation

If you’re thinking about diving into the investment home market and buying your first investment property, this is one of the first things you’ll need to know and you’ll use it on every single property you look at. The cap rate, or capitalization rate, is a quick and easy calculation that measures the rate of return on an investment home based on it’s purchase price and projected annual income. You can also use this to quickly compare multiple homes at different prices to determine which gives you the best rate of return.

Of course, when looking for an investment property in New Jersey, whether a single family home, a condo/townhouse, or a multifamily or apartment unit, give me a call and I’ll get you on my list for the most desirable income producing properties in Central New Jersey. Of course if you have any questions pertaining to investing in real estate or what might be a good real estate investment for you, let’s talk and we’ll discuss your goals and objectives and I’ll give you my ideas that might help you attain that.  Jim Simmons 609-529-0822

 

 

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